| On April 20, 2005, President George W. Bush signed | | | | consumer debt. The individual's filing may be |
| into law the biggest piece of special interest legislation | | | | considered bankruptcy abuse if they do not meet a |
| to ever come out of the United States Congress. | | | | "means test" that confirms the person's income is |
| The Bankruptcy Abuse Prevention and Consumer | | | | below the median. |
| Protection Act of 2005 (or BAPCPA) included a large | | | | Other provisions of the BAPCPA include a longer |
| number of significant changes to the United States | | | | waiting period between Chapter 7 debt discharges (8 |
| Bankruptcy Code which were largely designed to | | | | years), mandatory credit counseling, new discharge |
| make it harder for a person to qualify for Chapter 7 | | | | exceptions, and more difficult lien avoidance |
| bankruptcy. Many individuals had been abusing the | | | | standards. There were also new rules for debtors |
| provisions of Chapter 7, so a move was made to | | | | notifying creditors of a bankruptcy filing and limits to |
| limit the number of filings. | | | | the exemptions under which a debtor's property was |
| When an individual files for Chapter 7 bankruptcy, | | | | protected through the U.S. Bankruptcy Code. |
| most of their debts are discharged or forgiven, giving | | | | With these serious changes to the provisions for |
| them a chance to "reset" their financial situation and | | | | Chapter 7 bankruptcy filings explicitly making it "more |
| get a fresh start. The BAPCPA was designed to | | | | difficult for people to file for bankruptcy," it is more |
| force more people to file for bankruptcy under | | | | important than ever for individuals considering |
| Chapter 13, which generally requires payment of at | | | | bankruptcy to consult an experienced legal |
| least portion of most of a person's debts. The heavy | | | | professional. While it is true that some people abuse |
| hand of the banking lobby was clear in the new | | | | the Bankruptcy Code, it is still the best option for |
| bankruptcy condition. | | | | many individuals stricken by financial crisis. As such, |
| Under the BAPCPA, sometimes casually called the | | | | the BAPCPA has been subject to much criticism from |
| "New Bankruptcy Law," Chapter 7 cases are subject | | | | consumer advocacy groups, bankruptcy judges, and |
| to many new, strict provisions. One of the biggest | | | | financial law scholars. |
| changes is that a Chapter 7 filing may be converted | | | | For more information about Chapter 7 bankruptcy, |
| or dismissed entirely if signs of "substantial abuse" are | | | | visit the website of New Orleans bankruptcy lawyers |
| found in a debtor's case if they primarily suffer from | | | | Kervin & Young, LLC. |