New Developments in the Law

Following the U.S. House of Representatives, the U.S. Senate, on a vote of 83 to 15, passed a bankruptcy reform bill that will make it tougher for debtors to discharge unsecured debts.

The bill would establish a "means" test which would force debtors who make more than their state's median income and can afford to pay at least $6,000.00- or 25% of their debts, to file a chapter 13 bankruptcy- in which the court would impose a plan to repaid the debt, rather than a chapter 7 bankruptcy- in which the debts are completely erased.

The bill goes back to the House of Representatives to reconcile differences between the two versions.