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5 . Debts to be Discharged
Debts totaling more than $500 owed to a single creditor for luxury items that were acquired within 90 days of filing are presumed non- dischargeable, which means they must be repaid; cash advances of $750 or more taken within 70 days of filing are also presumed non- dischargeable and must be repaid. These debts must be paid back and cannot be written off. This protects creditors from consumers abus- ing the bankruptcy option by making large purchases or taking cash advances from credit cards when they know they intend to declare bankruptcy in the near future.
6 . Time between Chapter 7 Filings
Chapter 7 debtors cannot receive a second discharge of debts if a prior discharge of debts was given within eight years or less of the new filing. (Before the 2005 changes, this was six years.)
7 . Filing of Required Documents
The revised law requires an individual to submit a number of docu- ments to verify qualification for the bankruptcy filing. If these docu- ments are not submitted within the given time frame, the filing will be dismissed. The documents to be filed include:
• List of creditors
• Statements of assets and liabilities
• Statement of income and expenses
• Certificate of credit counseling
• Evidence of all paid employment for 60 days before filing
• Evidence of monthly net income and any anticipated income increase
• Tax returns for the most recent tax year and previous years as required
• Photo ID
Things You Should Know About Bankruptcy