New Bankruptcy Law Law and Legal Definition
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is referred to as New Bankruptcy law. This new bankruptcy legislation was passed and signed into law by President GW Bush. Provisions of the new laws are effective for cases filed on or after October 17, 2005. The new laws dramatically changed the way eligibility for filing bankruptcy was determined. It added a means test to the existing eligibility requirements for filing a bankruptcy case. This helps in determining whether an individual debtor's chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case. Other changes made by the new act include:
- The law has imposed new waiting periods in between the filings for Chapter 7 and some of Chapter 13 cases.
- Debtors seeking must undergo mandatory credit counseling before filing for Chapter 7 bankruptcy.
- The new Act limits the availability of automatic stay based the number of times a case is filed.
- More types of debts are categorized as non dischargeable.
- The Act changes the way courts calculate total repayment debt using disposable income and other figures.
