What is the Bankruptcy Reform Act?

The Bankruptcy Reform Act is a federal law that was enacted in 2005 which made major changes in the rules for filing for bankruptcy in California. It was intended to simplify the process of filing for bankruptcy and to discourage individuals from taking advantage of the system. The Act requires debtors to take a credit counseling course before they can file for bankruptcy and to pass a means test to ensure that they are unable to pay back their debts. Additionally, the Act allows creditors to object to an individual’s bankruptcy filing if they feel that the debtor is trying to unfairly avoid paying back their debts. The Act also changed the rules for discharging debts in bankruptcy. Under the Bankruptcy Reform Act, certain types of debt, such as student loans and taxes, are not dischargeable. If a debtor files for bankruptcy, they are still responsible for repaying these types of debts. Additionally, the Act makes it more difficult for individuals to file for Chapter 7 bankruptcy, which allows them to have their debts completely wiped out. Overall, the Bankruptcy Reform Act of 2005 was intended to make it harder for individuals to use bankruptcy as a way to avoid paying back their debts. The Act also changed the rules of filing for different types of bankruptcy, as well as the types of debts that can be discharged.

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What is the Bankruptcy Reform Act?

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