Filing Bankruptcy Under the New “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005”

First, read this for a general explanation of Bankruptcy. As of  October 17,  2005, sweeping  changes were enacted to the bankruptcy laws of the United States. Contrary to the title, this new law does nothing in the way of  “consumer protection.” Any improvements in “abuse prevention” will be minimal. Safeguards to prevent abuse were already adequate under the old law.

Essentially, lobbyists for the banks, credit card companies and automotive lenders have persuaded Congress to make it more difficult and burdensome to obtain a “fresh start” through bankruptcy, especially on your own, or using a document preparation service.

What does the new law require?

The new law imposes many new time-consuming requirements upon both debtors and their attorneys to document the debtors’ financial condition, and mandates extra procedures, such as counseling and classes.

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