Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

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The Bankruptcy Abuse Prevention and Consumer Protection Act is an act that impacts bankruptcy processes and procedures and forced changes to the U.S. Bankruptcy Code. The act was passed by Congress and signed into law by President George W. Bush on April 20, 2005.[1]

The act makes it harder for consumers to prove that they should be allowed to clear their debts in what's known as "fresh start" or Chapter 7 bankruptcy.[2]

Under the act, more filers will be required to file for Chapter 13 bankruptcy, which requires payment toward debt under a court-ordered payment schedule over three to five years. Critics of the new law say it hurts Americans who find themselves forced to file for bankruptcy due to unforeseen circumstances such as uninsured medical costs, loss of job, divorce, or a combination.[3]


Resources

References

  1. President Signs Bankruptcy Abuse Prevention, Consumer Protection Act. White House Archives.
  2. The New Bankruptcy Law And You. CNN Money.
  3. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. SIFMA Foundation: Tomorrow's Money.