Is there any relief for victims of disaster (i.e., Katrina) under the new bankruptcy provisions?

bankruptcy disaster relief consumer bankruptcy

Is there any relief for victims of disaster (i.e., Katrina) under the new bankruptcy provisions?

The US Justice Department trustee program in early October, 2005 lifted some of the more restrictive requirements of the new law to take into account the hardships experienced by victims of the hurricanes in the Gulf Coast Area (i.e., Katrina). Relaxed are the new rules to provide paperwork (i.e., tax returns, pay stubs, income and expense data) and to attend mandatory credit counseling courses.
Under the new law, those with income at or above their state’s average income are channeled into a Ch. 13 repayment plan unless they can show special circumstances that even partial repayment is not possible. Their income loss, expense increase and other adverse effects of the hurricanes are special circumstances and taken into account for purposes of the means test.
The Justice Department’s release is at http://www.usdoj.gov/ust/eo/public_affairs/press/docs/pr20051005.htm.
(Reviewed 11.14.08)

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