What is the Bankruptcy Abuse Prevention and Consumer Protection Act?

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) is a federal law that was passed in 2005 to help prevent consumer abuse in bankruptcy proceedings. BAPCPA amended Title 11 of the U.S. Code, which deals with bankruptcy proceedings. Its main purpose was to make it harder for individuals and businesses to use bankruptcy to avoid repaying debt. Under BAPCPA, those seeking to file for bankruptcy must complete a credit counseling program approved by the US Trustee Program before they can do so. Additionally, individuals must take a financial management course and provide evidence of their income before they can receive a discharge of their debts. Individuals must also meet more stringent requirements to qualify for Chapter 7 bankruptcy, meaning that some people may have to file for Chapter 13 instead. BAPCPA also affects trustees, lenders, and other creditors by making it easier for them to challenge a debtor’s bankruptcy filing. This can result in a debtor’s case being dismissed or their debts not being discharged. California state law is not impacted by BAPCPA; however, the law does affect California residents who are filing for bankruptcy in federal court. Residents of the State of California must comply with the provisions of BAPCPA in order to file for bankruptcy in the state.

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What is the Bankruptcy Abuse Prevention and Consumer Protection Act?

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