At a glance

Among the changes made by the new bankruptcy law:

•Sets up a new test for measuring a debtor’s ability to repay. People with insufficient assets or income can still file a Chapter 7 bankruptcy, which if approved by a judge erases debts entirely after certain assets are forfeited. But those with income above their state’s median income who can pay at least $6,000 over five years — $100 a month — will be forced into Chapter 13, under which a judge orders a repayment plan. In calculating income, people filing for bankruptcy may deduct various expenses as defined by the Internal Revenue Service, including food and clothing, and some health and disability insurance expenses.

•People seeking bankruptcy protection are required to take credit counseling courses within 180 days of filing.

•Gives priority to a spouse’s claims for child support among creditors’ claims on a debtor in bankruptcy.

•Allows for special accommodations for active-duty service members, low-income veterans and those with serious medical conditions in the new income test for bankruptcy applicants.

•Supercedes the unlimited homestead exemptions in states including Florida, Iowa, Kansas, South Dakota and Texas that allow wealthy people to file for bankruptcy and keep their mansions sheltered from creditors. The law limits the exemption to $125,000 if the person in bankruptcy bought his or her residence less than three years and four months before filing.

•Requires billing statements for credit card accounts to include an example of how long it would take to pay off a balance at a specific interest rate if only minimum payments are made.