Bankruptcy Laws Changing October 17th; New Jersey Bankruptcy Lawyers Offer Extended Office Hours on October 16, 2005

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Beat the deadline for the new bankruptcy laws on October 17th. New Jersey bankruptcy lawyers LoFaro & Reiser, LLP offer extended office hours on Sunday, October 16, 2005.

Being broke is getting tougher. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, designed to curb abusive consumer bankruptcy filings, affects anyone who files for bankruptcy beginning Oct. 17.

File by October 16, 2005 and avoid the new bankruptcy laws. LoFaro & Reiser, LLP is a full service bankruptcy law firm offering extending office hours on October 16, 2005 between 4:30 p.m. to 11:30 p.m. Our attorneys will be present at the office to assist individuals who are looking to file for bankruptcy protection before the new law goes into effect.

While there are a few bright spots in the new law, the overall picture is pretty dim for consumers deeply in debt.

A wide range of provisions will force consumers into lengthy, expensive proceedings potholed with potential pitfalls. Miss one filing deadline and your bankruptcy could be dismissed, leaving you facing a series of escalating penalties when you refile that will make it that much harder to get back on your feet, financially.

And that's not the worst part. A complicated means test, administered by your own attorney, will determine whether you'll be allowed to file under the more-forgiving Chapter 7 or a Chapter 13 proceeding.

In addition, your collateral, including furniture, cars and other possessions, will be assessed at a higher value, inflating the overall value of your assets.

When you're worth more, your creditors can potentially get more out of you. It will also be harder to get out from under car loans, overdue taxes, student loans and credit card debt.

While cracking down on deadbeats who abuse the system isn't going to leave anyone reaching for the tissue box, many of those who file for bankruptcy are pushed to the edge by unemployment and catastrophic health problems.

"There are dozens of catches [in the law] that will make it difficult for people who legitimately need to file for bankruptcy," says Travis Plunkett, legislative director for the Consumer Federation of America. "The strategy of the people who supported this bill appears to be death by a thousand cuts. There are lot of traps and gotchas designed to snare people and keep them from discharging debt that they really may need to get out from under."

Pre-filing changes

Means test. The means test is a major change in the law. It is used to determine whether an individual can file under Chapter 7 or Chapter 13 and is administered by the client's attorney. Chapter 7 generally liquidates the debts of consumers, while Chapter 13 requires them to pay back their secured debt and as much of their unsecured debt as possible.

While there are a few bright spots in the law, the overall picture is pretty dim for consumers deeply in debt.

A wide range of provisions will force consumers into lengthy, expensive proceedings potholed with potential pitfalls. Miss one filing deadline and your bankruptcy could be dismissed, leaving you facing a series of escalating penalties when you refile that will make it that much harder to get back on your feet, financially.

And that's not the worst part. A complicated means test, administered by your own attorney, will determine whether you'll be allowed to file under the more-forgiving Chapter 7 or a Chapter 13 proceeding.

In addition, your collateral, including furniture, cars and other possessions, will be assessed at a higher value, inflating the overall value of your assets.

When you're worth more, your creditors can potentially get more out of you. It will also be harder to get out from under car loans, overdue taxes, student loans and credit card debt.

While cracking down on deadbeats who abuse the system isn't going to leave anyone reaching for the tissue box, many of those who file for bankruptcy are pushed to the edge by unemployment and catastrophic health problems.

"There are dozens of catches (in the law) that will make it difficult for people who legitimately need to file for bankruptcy," says Travis Plunkett, legislative director for the Consumer Federation of America. "The strategy of the people who supported this bill appears to be death by a thousand cuts. There are lot of traps and gotchas designed to snare people and keep them from discharging debt that they really may need to get out from under."

Pre-filing changes

Means test. The means test is a major change in the law. It is used to determine whether an individual can file under Chapter 7 or Chapter 13 and is administered by the client's attorney. Chapter 7 generally liquidates the debts of consumers, while Chapter 13 requires them to pay back their secured debt and as much of their unsecured debt as possible.

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Glenn Reiser
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