What is the Bankruptcy Reform Act?

The Bankruptcy Reform Act is a piece of federal legislation enacted in 2005 to improve the United States Bankruptcy Code. The Act allows individuals to file for bankruptcy if they have accumulated too much debt. It also creates new bankruptcy protection laws to help individuals get out of debt more quickly. In Washington, the Bankruptcy Reform Act provides debtors with a number of advantages, including the ability to choose between different types of bankruptcy, such as Chapter 7 and Chapter 13. In Chapter 7, debtors can liquidate assets to pay their debts; while in Chapter 13, debtors can restructure their debt payments to better manage their finances. The Bankruptcy Reform Act also requires debtors to obtain financial counseling before filing for bankruptcy. This counseling helps debtors understand the consequences of filing for bankruptcy and make informed decisions about their future finances. The Bankruptcy Reform Act also makes it easier for debtors to discharge certain debts, including student loan debts and tax debts. Finally, the Bankruptcy Reform Act helps protect creditors by setting limits on how much debtors can discharge in bankruptcy court.

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