Bankruptcy Abuse Prevention and Consumer Protection Act

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed and radically changed U.S. bankruptcy policies. Prior to the act, anyone could file for Chapter 7 bankruptcy and immediately have most of their debts erased. The new law put a limit on the number of people who could declare Chapter 7. Those with incomes above the medium income for their state would instead have to file for Chapter 13. These and other restrictions created by BAPCPA have altered the terms of bankruptcy today.

The passage of BAPCPA was applauded by credit card companies and banks, who claimed that prior to the act it was too easy for anyone to file for Chapter 7. Individuals who were reckless and irresponsible with their finances, such as compulsive shoppers and gamblers, could simply file for bankruptcy and have their debts resolved if they became unable to repay the debts. Now if these individuals become mired in debt but make a high enough income, they will still be responsible for paying back the debts over a period of time under Chapter 13.

as helped to end extreme abuse of Chapter 7, it has also restricted others who unwillingly went into debt. For example, individuals who become severely ill and amass a large amount of medical debt may no longer be allowed to absolve their debts with Chapter 7. People who have been laid off in the bad economy and are now unable to pay bills or pay off debts may also be forced to file for Chapter 13 instead. In some cases BAPCPA may punish individuals who have been forced into debt.

Contact Us

To learn more about filing for bankruptcy and your bankruptcy options under the Bankruptcy Abuse Prevention and Consumer Protection Act, please contact the experienced Milwaukee bankruptcy lawyers at the DeLadurantey Law Office, LLC today at 414-377-0518.