What is the Bankruptcy Reform Act?

The Bankruptcy Reform Act is a federal law in the United States enacted to help consumers dealing with debt and bankruptcy. It was enacted in 2005 in Nebraska and is also known by its official title, the Bankruptcy Abuse Prevention and Consumer Protection Act. The primary goal of this law is to reduce the abuse of bankruptcy and establish a means of dealing with debt that is fair to both debtors and creditors. The Bankruptcy Reform Act makes it harder to qualify for bankruptcy protection. It requires debtors to take a credit counseling course before they can file for bankruptcy and also requires them to complete a financial management course once they are in bankruptcy proceedings. The new law also restricts the number of times a person may file for bankruptcy. In addition, the law limits the ability of a debtor to discharge certain debts, such as student loans, child support obligations, and taxes owed. The Bankruptcy Reform Act also provides relief for those who are not able to fully repay their debts. It offers different forms of bankruptcy, including chapter 7, which discharges most debts, and chapter 13, which organizes the repayment of some of a debtor’s debts. The Bankruptcy Reform Act also provides more options for debtors, such as debt settlement and debt validation. By enacting the Bankruptcy Reform Act, Congress hoped to better protect debtors and creditors alike. By making it harder to qualify for bankruptcy, it helped to deter abuse of the system and provided debtors with more options to deal with their debts responsibly.

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What is the Bankruptcy Reform Act?

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