Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)


You bankruptcy attorney will help you navigate the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). If you know anyone who filed for bankruptcy before 2005, be careful when listening to their advice because bankruptcy has undergone a complete overhaul and what was once true just isn't anymore. There's a lot more to it.

Why Bankruptcy Reform

Some people get really upset about BAPCPA. While parts of it are more difficult to understand and wade through it's important to understand why reform was necessary. It was felt that too many people were taking advantage of the current state of bankruptcy and the government wanted to stop bankruptcy abuse.

There was also an attempt made at helping people avoid future financial problems by requiring that they receive some form of credit and financial counseling. The purpose of these classes was try to give people alternatives to filing bankruptcy and to help them manage their financial affairs after bankruptcy. To accomplish these goals there have been several changes that affect everyone who now files for bankruptcy in the United States.

Changes to Bankruptcy in the U.S.

Important changes relate to credit and financial education; within 180 days before a bankruptcy is filed the petitioner needs to seek credit counseling from an approved agency and will need to provide a certificate as proof. There are several ways in which you can seek the counseling and a lot of companies offering these services, just make sure that the one you choose is approved by the United States Trustee. In addition to the credit counseling class, a financial management course is also required. This 2nd class must be completed after your bankruptcy is filed and is necessary for you to receive a bankruptcy discharge.

More financial documentation is also required so expect to have all of your federal tax returns filed and to have your returns for the past four years available. Paystubs will be necessary from at least the last 180 and perhaps longer. Additionally, many bankruptcy trustees are closely examining people's bank statements for the several months prior to the bankruptcy filing.

As you can see, the 2005 BAPCPA amendments created many additional requirements for those wishing to get a fresh start in bankruptcy. Therefore, it is vitale that you get the advice of an experienced Chicago Bankruptcy Attorney.