Recent Changes to U.S. Bankruptcy Law

In August, Congress passed several laws designed to amend current bankruptcy law in the U.S. in order to make it easier for certain people to file for bankruptcy. As an article in The Guardian explains, the legal changes will make it easier for certain individuals and small business owners alike to seek bankruptcy protection. If you are considering filing for Chapter 7 bankruptcy and currently receive veterans’ disability payments, you should learn more about recent changes to U.S. bankruptcy law. In addition to providing help for disabled veterans who want to seek bankruptcy protection, recent changes to the law also may be able to help some consumers who are also small business owners.

We want to tell you more about these changes to the law and to discuss some ways in which they may be able to provide relief for consumers in Oak Park, Illinois.

How the HAVEN Act Will Make it Easier for Disabled Veterans to File for Bankruptcy
The first of the recent changes to the law is the Honoring American Veterans in Extreme Need (HAVEN) Act. According to a recent article in Military.com, the law “extends the same protection for veterans disability payments that’s afforded Social Security disability payments.” To clarify, currently disabled veterans must count their veterans’ disability payments as part of their income when taking the “means test” to determine whether they are eligible for Chapter 7 bankruptcy. In addition, these disability benefits can be counter as “disposable income subject to seizure during a bankruptcy.”

With the passage of the HAVEN Act, disabled veterans will be able to keep their disability payments while remaining eligible for Chapter 7 bankruptcy. The legislation received bipartisan support, and it was introduced by Senators Tammy Baldwin and John Cornyn. The senators emphasized that Social Security disability payments “have long received protection from bankruptcy creditors,” reasoning that veterans disability payments should receive the same protections. President Trump signed the bill into law in late August 2019. Consumer protection advocates underscore that this change to U.S. bankruptcy law will make bankruptcy protection available to more veterans who need it.

Other Recent Changes for Consumers and Small Business Owners
If you own a small business and are currently considering bankruptcy, another recent change to U.S. bankruptcy law will come as good news. When Trump signed the HAVEN Act into law, he also signed to additional pieces of legislation that could impact consumers who also own small businesses.

First, the Small Business Reorganization Act (SBRA) of 2019 will make Chapter 11 bankruptcy processes easier for many small business owners. The new law gives small businesses more time to file reorganization plans, and it also eradicates the requirement that small businesses repay all debts in order to keep ownership of the business. It will take effect in February 2020. In addition, the Family Farmer Relief Act of 2019 will raise the debt limit for family farmers who want to file for Chapter 12 bankruptcy.

Contact an Oak Park Consumer Bankruptcy Attorney
Do you have questions about filing for bankruptcy? An experienced and compassionate Oak Park bankruptcy lawyer at our firm can discuss your concerns with you today. Contact the Emerson Law Firm for more information.



See Related Blog Posts:

What Documents Do I Need to File for Bankruptcy?

How Consumer Concerns Impacted a Mortgage Servicer’s Bankruptcy Filing


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