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The Legacy of the Bankruptcy Abuse Prevention and Consumer Protection Act

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The Legacy of the Bankruptcy Abuse Prevention and Consumer Protection Act

A decade ago, there was a lot of controversy about whether or not bankruptcy reform was necessary and what form it should take. After a lot of back and forth debate, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was drafted and enacted in both the House and Senate in 2005, leading to the most substantive revisions to the Bankruptcy Code in decades.

Advocates for the BAPCPA claimed that reform was necessary in order to prevent fraud and abuse. Although there was no evidence of widespread abuse of the bankruptcy system, it was this call to action that led to the most sweeping changes in the Code. Those opposed to the new provisions in the BAPCPA claimed that the revisions made it much more difficult for someone who needed the protections of the Bankruptcy Code to get the relief that they needed. Some of the most significant changes related to the imposition of new income restrictions on those who could file for bankruptcy. In addition, there was a new Means Test that laid out a series of parameters and, essentially, hoops that a debtor must jump through in order to file for Chapter 7 bankruptcy.

Many people view the BAPCPA as a victory for the credit card companies and banking industry. It definitely stripped some rights from debtors, including modifying the automatic stay provisions as they related to eviction proceedings. In addition, it placed limitations on the discharge of student loans and imposed restrictions on the claiming of homestead exemptions.

One of the other big changes heralded in by the BAPCPA was the increase in fees for pursuing a bankruptcy action. Moreover, there are fewer exemptions for individuals who previously would have qualified for a fee waiver. Making bankruptcy more expensive seems counterintuitive to the motivations behind the creation of the Bankruptcy Code.

In addition to the changes to the types of protection and discharge available under the Bankruptcy Code, the BAPCPA imposed a lot more clerical requirements on those seeking to file a bankruptcy case, including the completion of many types of forms that complicated the process to the point where filing without the assistance of an attorney became extremely difficult. One of the changes that does benefit debtors is the requirement for expanded credit counseling. Although this probably could have been done more effectively, it does present an opportunity for a person to develop more skills to deal with financial setbacks moving forward.

As the BAPCPA approaches the ninth anniversary of its enactment in October 2005, there is good news for those individuals who had filed for Chapter 7 protection after the BAPCPA was passed – it now is possible to file again. Many people were caught in the financial crisis of the past six years and were unable to file a Chapter 7 action because of a previous filing and the requirement of waiting for eight years. For many people, this means an opportunity to shake off the negative financial situation that has weighed them down and begin with a strong foundation for a stable financial future.

When Georgette Miller founded the Law Offices of Georgette Miller & Associates, P.C., she did so with the intent of helping people who were suffering from financial hardships. By developing a strong bankruptcy practice that is recognized as one of the preeminent firms in this field, the attorneys in New York, New Jersey, Pennsylvania, Delaware, Maryland, and Metro D.C. have ensured that they have the skills to deal with any changes to bankruptcy law so that our clients get the best results possible. To schedule an appointment to discuss your situation, call us at 1-866-964-6529 ((866) 964-6529).