Understanding BAPCPA

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was signed into law by President Bush on April 20, 2005 and took effect on October 17, 2005. Primarily, the law was enacted to prevent debtors from filing Chapter 7 bankruptcy and eliminating their debt when they have the ability to repay all or a portion it. The law set in place various requirements to make it more difficult for people to file for both Chapter 7 and Chapter 13 bankruptcy.

Understanding the “means test”

The biggest obstacle that BAPCPA created is a “means test.” The test is an income based calculation that most debtors must pass to qualify for Chapter 7 bankruptcy. Initially, the test compares the debtor’s gross household income, for the previous six completed calendar months, against the median income for the state of residence. If the debtor’s income is less than the median, then the debtor has passed the “means test.” If the debtor’s income is greater than the median, then the test continues until a final determination is reached. In Chapter 13 bankruptcy cases a similar test is used to determine how much money a debtor is required to pay to unsecured creditors and the minimum length of time of the repayment plan.

Credit Counseling

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 also required that individuals filing either Chapter 13 or Chapter 7 bankruptcy complete two credit counseling classes. The first course must be completed before the case is filed. The second course is completed after the filing of the case.

Get the help you need to file for bankruptcy

With these and other changes in the law, it is critical to have an experienced law firm on your side. The bankruptcy lawyers at Jeff Field & Associates have over 70 years of combined experience handling bankruptcy cases. We understand BAPCPA and will take the time to explain the process to you so that you can decide if bankruptcy is the best option.

Take control of your finances and reclaim your life

From offices conveniently located in Athens, Douglasville, Gainesville,  Lawrenceville, Marietta and  Scottdale,  Jeff Field & Associates is able to help people throughout the Atlanta metropolitan area and beyond. To schedule an appointment call 404-381-1278 or contact us online. Jeff Field & Associates represents clients in Rome,  Atlanta, Gainesville, Newnan, Macon and Athens. Please visit our blog to view posts by our attorneys for additional information about bankruptcy and a variety of other topics we hope you will find interesting and helpful.