“B” is for Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
Maybe you have seen the advertising by some bankruptcy attorneys that say “Yes, you still can file for bankruptcy!” This advertising was the result of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that convinced a lot of people that bankruptcy was no longer going to be available to them. The changes to the bankruptcy law by BAPCPA were put into place by banking lobbyists to make filing for bankruptcy more difficult, but not eliminating the option of bankruptcy altogether. Some of the major changes include:
The Means Test
The largest change to the Bankruptcy code was the implementation of a new “means test” to determine whether a debtor is eligible for chapter 7 (liquidation) or must file under chapter 13 (wage-earner repayment plan). Basically in Michigan if you are single and earn over $43,677, or if your household size is two and earn over $50,079, for a household size of three the number is$58,467, and $70,237 for a household size of four, you may not be able to file for chapter 7 bankruptcy instead you may have to seek Chapter 13 relief. It’s important to note that these numbers are updated periodically and are based on the States median income by family size. You are also allowed deductions based upon your mortgage payments, car payments, Child support and other variables that can still make you eligible for Chapter 7 relief even if your income is higher than the state median income.
Credit Counseling / Debtor Educations Classes
The BAPCPA also now requires you to take one credit counseling class prior to filing bankruptcy, and one debtor education class prior to you receiving your bankruptcy discharge. These classes take about two hours and can be completed online, or over the phone, from the privacy of your own home.
Waiting Period between Chapter 7 Filings
BAPCPA changed the waiting period between Chapter 7 bankruptcies to 8 years. Prior to BAPCPA, people could seek Chapter 7 Bankruptcy protection once every 6 years. The waiting period is filing date to filing date. So if you filed for Chapter 7 bankruptcy on October 16, 2005 (The last day to file pre-BAPCPA) you will once again be eligible to file Chapter 7 Bankruptcy on October 17, 2013.
In summary, BAPCPA has simply created several road blocks for you to navigate through to receive a Chapter 7 Bankruptcy or may make the Chapter 13 Bankruptcy the best option available to you, but BAPCPA has not eliminated Bankruptcy from being a viable option to give you a fresh start.
Peter Behrmann is a Michigan bankruptcy attorney. From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.
Photo Credit: TooFarNorth
Other Bankruptcy Attorneys Blogging on letter “B”:
- Bad Faith Filing – Miami Bankruptcy Attorney, Dorota Trzeciecka
- Bailout – Jacksonville Bankruptcy Attorney, Monica D. Shepard
- Bank Account – New York Bankruptcy Lawyer, Jay S. Fleischman
- Bank Account – Law Offices of Daniel J. Winter, Chicago Bankruptcy Attorney
- Bank Account – Daniel J. Winter, Chicago Bankruptcy Attorney
- Bank Account Levy – Philadelphia Bankruptcy Lawyer, Raymond Kempinski
- Bank Tips – Wisconsin Bankruptcy Lawyer, Bret Nason
- Bankruptcy – Taylor Michigan Bankruptcy Lawyer, Christopher McAvoy
- Bankruptcy Estate – Richmond Bankruptcy Attorney, Mitchell Goldstein
- Bankruptcy Mill – Chicago Bankruptcy Attorney, Kyle A. Lindsey
- Bankruptcy Petition Preparers – Colorado Bankruptcy Attorney Bob Doig
- Bankruptcy Petition Preparers – Los Angeles Bankruptcy Law, Christine Wilton
- Bar Date – Ormond Beach Bankruptcy Attorney, Lewis Roberts
- Best Interest of Creditors – Honolulu Bankruptcy Attorney, Stuart Ing
- Beware of these Credit Card Offers – Marin County Bankruptcy Lawyer, Catherine Eranthe
- Borrow – San Francisco Bankruptcy Attorney, Jeena Cho
- Business – Omaha Nebraska Bankruptcy Attorney, Ryan D. Caldwell
- Business – Northern California Bankruptcy Lawyer, Cathy Moran
- Business & Individuals – Philadelphia Suburban Bankruptcy Lawyer, Chris Carr
- Business bankruptcy – Los Angeles Bankruptcy Blog, Mark J. Markus
- Businesses and Business Debt – Newnan Georgia Bankruptcy Lawyer, Rick Palmer
- Buy Low and Sell High – Cleveland Area Bankruptcy Lawyer, Bill Balena
- Bankruptcy Timeline – Pittsburgh Bankruptcy Attorney Shawn N. Wright
- Best Efforts Test St. Louis, Missouri Bankruptcy Attorney, Nancy Martin
- Bifurcate – Tuscaloosa and Birmingham Bankruptcy Lawyer, Melinda Murphy Dionne