Boca Raton consumer bankruptcy lawyers

Bankruptcy Abuse Prevention and Consumer Protection Act

The Bankruptcy Abuse Prevention and Consumer Protection Act, colloquially known as “The New Bankruptcy Law” due to its excessively long name, was passed in 2005. It was passed and signed into law by President Bush in April 2005. The act went into effect in October of 2005.

The law attempts to make it more difficult for consumers to discharge debts under Chapter 7 bankruptcy. Some people who are denied access to Chapter 7 bankruptcy can file for bankruptcy under Chapter 13. This bill affects both consumer and business bankruptcy filings.

Many of the bill’s provisions were designed to make it more difficult for people to file. It includes a variety of new provisions which make it not only harder to file for bankruptcy but also more expensive.

The means test is the biggest addition to the bankruptcy process. This test applies to people whose gross income is higher than the median income of their state. It does not take into account net income. If an individual has too high of an income, he or she may not file for Chapter 7 bankruptcy. The debtor may be able to file under Chapter 13 but there is no guarantee.

The other provisions, while new, do not have the same effect that the means test does. One new provision is that individuals must undergo mandatory credit counseling and debtor education. This is true for all potential bankruptcy filers. Another change is the increase in the amount of paperwork and the increase in filing fees.

A significant change is that attorneys are more liable for their clients’ mistakes. They are now expected to conduct their own investigation into their clients’ financial well-being and, if there are inaccuracies, will be held accountable.

If you are considering filing for bankruptcy, contact the Boca Raton consumer bankruptcy lawyers of Klein Attorneys at 561-353-2500 to discuss your situation and to determine if bankruptcy is best for you.