This act requires all individual debtors who file for bankruptcy on or after October 17th, 2005, to receive credit counseling. The credit counseling must begin within six months prior to filing for bankruptcy relief. The credit counseling course also includes studying financial management after bankruptcy has been formally filed.
Also, under the 2005 Bankruptcy Act, an applicant’s income and expenses are studied to decide if they’re eligible to file for Chapter 7 bankruptcy or if Chapter 13 bankruptcy must be filed.
The analysis of test will review the average income of an applicant for the 6 months immediately prior to filing, which will then be compared to the median income for Arizona. If the study reveals a level of income below the median, Chapter 7 will likely be an option.
In situations where income exceeds the median income for Arizona, more elements of the means test will be evaluated to determine if Chapter 7 can be filed or if the applicant must file Chapter 13 bankruptcy.