The largest reform of the United States Bankruptcy Law in 25 years took effect on October 17, 2005. Under the new law, those seeking to file bankruptcy must now provide the following:

• A Credit Counseling Certificate prior to the filing of bankruptcy;
• Proof of income for the six month prior to the filing of the bankruptcy;
• A copy of the debtor’s most recent tax return;
• A Financial Education Certificate prior to the discharge of the bankruptcy.

In addition, if the debtor’s household income is over the California median income, the debtor will have to qualify under the “Means Test” prior to filing the Chapter 7 bankruptcy.

There has been much overreaction and misleading information about the Bankruptcy Reform Act of 2005 and how it would apply to the average consumer. Although there are many more “legal hoops” to jump through, we are still able to qualify 80% to 90% of those persons we were able to qualify under the old law.

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