Key Highlights of the Bankruptcy Reform Bill
by AccountingWeb on
The House of Representatives recently approved legislation to reform the nation's bankruptcy laws, making it harder for debtors to wipe out their debts without paying them off.
Below are a few highlights of this law.
- The bill calls for debtors to complete personal financial management courses before their debts are discharged in bankruptcy;
- Increase the priority of child-support and alimony payments;
- Defines what is a realistic amount to pay for food, transportation, housing and clothing, and requires the debtor to live within those guidelines unless there is a good reason not to;
- Makes it more difficult to guard assets by moving to a state with a high homestead exemption and buying an expensive house;
- Forces the debtor to pay the full cost of an auto loan or lose the vehicle to repossession, even if the vehicle isn't worth the outstanding balance on the loan;
- Shields money that has been put into education IRAs;
- Places a cap of $1 million on the amount in Roth and regular IRAs that can be shielded from creditors;
- Requires bank regulators to examine whether credit card companies are offering credit haphazardly, without regard to whether consumers can repay their debt, and whether the resulting debt is contributing to bankruptcies;
- Calls for debtors to pay all charges that were incurred three months before filing for bankruptcy;
- Gives landlords more flexibility to evict bankrupt tenants who are behind on their rent;
- Lets creditors ask the court to dissolve the bankruptcy plan if a debtor is late in filing paperwork, such as copies of paycheck stubs and tax returns;
- Requires credit card issuers to disclose how long it will take to pay off a balance if you pay just the minimum every month, and prohibits the issuer from closing your account just because you pay off the balance every month and don't pay interest.
- Instructs the Federal Reserve to find out whether people are going bankrupt because of credit card debt amassed in college.
You may like these other stories...
The Financial Accounting Standards Board (FASB) had hoped to issue a final standard on revenue recognition during the first quarter of this year. However, the standard-setting organization confirmed today that the timetable...
IRS revokes group’s tax exemption over anti-Clinton statementsGregory Korte of the USA Today reported on Monday that the IRS has revoked the tax-exempt status of a conservative-aligned charity, the Patrick Henry Center...
CFOs are having a tough time filling vacancies quickly in their accounting and finance departments, according to a new survey from staffing services firm Robert Half.Open staff-level positions in accounting or finance take...
Upcoming CPE Webinars
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.