2005 Bankruptcy Laws

Bankruptcy laws saw a lot of changes in 2005 with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. These new 2005 bankruptcy laws basically require consumers to go through more steps before they are actually able to file bankruptcy. Fewer people will qualify for Chapter 7 filing, and more will have to file Chapter 13 instead. For example, before a consumer can file bankruptcy under the new laws, credit counseling is first required. In addition, some of the protections previously afforded those filing bankruptcy have been eliminated. For example, those who file bankruptcy are no longer automatically protected from eviction proceedings, driver's license suspensions, divorce proceedings or child support proceedings. In addition, before a bankruptcy can be discharged, the filers must attend a government approved financial management education program.

Fast Facts

  • Under the new laws, repayment of child support and alimony will become more of a priority.
  • One of the major differences between Chapter 7 and Chapter 13 is how the debt is repaid.

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