What is the Bankruptcy Reform Act?

The Bankruptcy Reform Act is a federal law that affects all bankruptcy cases filed in the United States. It is meant to make the process of filing and resolving a bankruptcy case fairer and simpler. In Georgia, the Bankruptcy Reform Act has several provisions that specifically apply to bankruptcy cases filed in the state. First, the Bankruptcy Reform Act established a “means test” that must be met in order to qualify for Chapter 7 bankruptcy. This means test looks at the amount of income and expenses that the debtor has in order to determine whether they can repay some of their debts. If the means test is passed, the debtor can proceed with Chapter 7 and liquidate their debt. The Bankruptcy Reform Act also established that debtors must attend credit counseling before filing for bankruptcy. This is meant to ensure that the debtor is aware of all their options and is not simply rushing into bankruptcy as a way to get out of their debt. Finally, the Bankruptcy Reform Act requires that debtors must complete a financial management course after filing for bankruptcy. This is meant to teach debtors fiscal responsibility and help them avoid getting into the same financial situation in the future. Overall, the Bankruptcy Reform Act is designed to make the bankruptcy process simpler and fairer for all parties involved. In Georgia, it provides protections to debtors and ensures that they are aware of all their options before filing for bankruptcy.

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