John A. DiGiamberardino Bankruptcy Law Blog on Lawyers.com

Even before the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, individuals expressed concerns that the ability to file bankruptcy would cease to exist for consumers and businesses. Nothing has been farther from the truth. For instance, in the twelve-month period ending December 31, 2010, businesses filed 56,282 bankruptcies, and consumers filed 1,538,799 bankruptcies. Clearly, while the 2005 Act changed the rules, bankruptcy remains a viable option for those individuals and businesses experiencing financial hardship.

Changes to bankruptcy law did not eliminate the ability to file

The name of the new act actually identifies the purposes for its enactment—to eliminate perceived fraudulent use of bankruptcy and to provide financial protection for consumers. The following are some of the changes made to the rules of bankruptcy:

• Means testing determines if an individual or business qualifies for liquidation under Chapter 7 or if they must restructure under Chapter 13 (typical for consumer bankruptcy) or Chapter 11 (available for business bankruptcy). Although federal law governs bankruptcy rules, state guidelines control means testing because the standard of living differs between one area of the US and another.
• Credit counseling is required for consumers 180 days prior to filing for bankruptcy, but the counseling agency must provide a program approved by the federal government. An experienced local attorney can help you find an approved program or guide you to one of the better programs from the list provided by the United States Department of Justice .
• The law expands the definition of debt not dischargeable in bankruptcy over the prior list.
• Clarifications pertaining to exemptions for retirement savings now exist as long as the IRS exempts them from the estate of the debtor.
• Postsecondary education savings through 529 and IRA plans now exist on the list of exclusions under certain circumstances.
• Debt relief agencies must now operate under stronger standards of professionalism.

Contact us for experienced bankruptcy support in Pennsylvania

If you reside in Lehigh County, Lancaster County, or Berks County and believe bankruptcy can provide the relief you need for a better financial future, contact the experienced attorneys at the law firm of Case, DiGiamberardino & Lutz, P.C.[cjs2]  to schedule an initial consultation. Call us to discuss your bankruptcy options at one of our convenient locations.

Case, DiGiamberardino & Lutz, P.C.

Allentown office
The Sovereign Building
609 Hamilton Street Allentown, PA 18101
Telephone: 610-740-1017

Wyomissing office
845 N. Park Road, Suite 101
Wyomissing, PA 19610
Telephone: 610-372-9900

Lancaster office
255 Butler Avenue, Suite 102 Lancaster, PA 17601
Telephone: 717-209-7077