The new bankruptcy law generally is not effective for six months after Bush signs it. Some provisions are effective immediately. One important change immediately effective is the $125,000 limit on protected homestead equity for those debtors who have owned their residence less than 40 months Anyone with homestead equity greater than $125,000 and does not meet the 40 month waiting period and who is considering filing bankruptcy before the new bankruptcy law goes into effect should file bankruptcy immediately. The bill may be passed and signed in a couple weeks. File now and submit your completed schedules later.
The new bankruptcy law impacts homestead protection only in bankruptcy court and does not affect the homestead protection available in state court collection proceedings.