Another major requirement for the law change was that people had to provide proof of their income prior to filing. In my office as an Old Mill Creek bankruptcy lawyer, you need to provide two months’ worth of paycheck stubs or other payment advices or proof of income prior to filing. The reason why I need this information is, first, I need to prepare the petition off of it, but second, it’s mandated under the bankruptcy code that debtors provide this information to their attorney.
After the case is filed I must submit this information to the Chapter 7 panel trustee who will then look at it and examine it and make a determination as to whether or not it matches what information is put into the bankruptcy petition. That is the trustee’s main role in the bankruptcy process.
Another requirement under the new law is the providing of a Federal Tax Return in a Chapter 7 bankruptcy case. This is simply providing a copy of your most recent Federal Tax Return to your attorney who will then forward that information to the trustee along with your pay advices.
The last requirement that changed drastically in Chapter 7 bankruptcy cases is the two-hour financial management instruction course that must be completed prior to the case ending in order for a debtor to receive a discharge. This additional requirement has probably tripped up more debtors than any other, and the reason is this; if you do not take that two-hour financial management class after the case is filed but prior to discharge then your case will close without a discharge. A case closing without a discharge is as if the bankruptcy never happened in terms of the debts. The debts still remain due and owing despite the fact that you’ve paid your attorney, paid the filing fee, provided some of the documentation and gone to court; thus, you must take this two-hour financial management class as soon as possible after the case is file so that you don’t run the risk of your case closing without a discharge.
If your case closes without a discharge it can be reopened for a huge filing fee plus an attorney fee and of course you must take the two-hour class for us to be able to reopen the case and file the certificate. Follow the advice of your local bankruptcy lawyer and you will not have a problem with the financial management class.