What is the National Bankruptcy Reform Act?

The National Bankruptcy Reform Act of 1994 (also known as the Bankruptcy Reform Act of 1994) was a major piece of legislation enacted to reform the federal bankruptcy system in the United States. The legislation was written with the intention of making bankruptcy more difficult for debtors while also providing creditors with a better chance of recovering at least some of the money owed to them. The Bankruptcy Reform Act of 1994 focused on four main points to help reform the bankruptcy system: revising the bankruptcy process, eliminating certain abuses of the bankruptcy system, promoting financial responsibility, and providing protection for certain assets of debtors. With regard to the bankruptcy process, the Bankruptcy Reform Act set up new requirements for filing, provided for an improved system of bankruptcy court, and required the appointment of a trustee to manage each case. The Act also sought to eliminate certain abuses of the system, such as the ability to discharge financial debt without having to pay off some of the debt. The Bankruptcy Reform Act of 1994 had significant implications for the State of Delaware. Specifically, the Bankruptcy Reform Act included a provision allowing states to opt-out of the federal standard for bankruptcy proceedings. This allowed Delaware to enact its own unique set of bankruptcy filing requirements and regulations in order to provide greater protection for its citizens. As a result, Delaware residents are now able to benefit from more stringent bankruptcy laws while still being able to access the federal resources.

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What is the National Bankruptcy Reform Act?

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