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New Bankruptcy Laws
Abstract
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidations" or "reorganizations." (Nolo, 2005) President Bush signed a bankruptcy reform bill that made it more difficult than ever for individuals to eliminate their debts through bankruptcy on April 20th, 2005. This new law, Bankruptcy Abuse Prevention and Consumer Protection (BAPCPA), took effect on October 17, 2005. This new law is the biggest reforms in U.S. bankruptcy law in over 10 years. Personal bankruptcies have jumped in September to the highest on record. Filings averaged more than 9,000 per day, up roughly fifty percent from last year's daily volume, during the first two weeks of September. (Aborgast, 2005) The credit card industry is one of the largest advocates of this bill stating that it will cut back on the inundation of bankruptcy filings by gamblers, compulsive shoppers and drug users to name a few. The credit industry as a whole has fought hard for the past seven years to get this law passed. The impact to them will be tremendous because there were be less people filing for Chapter 7 bankruptcies that clear the individual's debt. More people will have to make payment plans to their debt holders after receipt of credit counseling. Many people and organizations oppose the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 due to harm that can be done to individuals that are not abusing the system. (Sahadi, 2005)
New Bankruptcy Laws
Two main filings for ...