Today, October 18, 2013, marks eight years since the country’s bankruptcy laws received a huge makeover, in an attempt to reduce the abuses of the system and shift more debtors into repayment plans, rather than have their slate wiped clean. The timeline is significant because when the Bankruptcy Abuse Prevention and Consumer Protection Act took effect on Oct. 17, 2005, it changed the countdown clock to eight years — from six years previously — before a debtor is eligible to file bankruptcy again. Now, anyone that filed under the old law is eligible to file, again.
The Bankruptcy Abuse Prevention and Consumer Protection Act changed far more than just the waiting period to re-file. It also established a “means test” to determine whether a debtor had the ability to repay. It also required that filers take pre-bankruptcy credit counseling and post-bankruptcy money-management courses. It also required lengthier documentation and increased fact verification by bankruptcy attorneys.
The goal of the reform law was “to prevent abuse and make the bankruptcy act fair.” Some experts contend that the reforms were partly intended to decrease bankruptcy filings, and as predicted, filings have dropped. In 2004, the year before the reforms were enacted, annual business and consumer filings totaled nearly 1.6 million. Other than 2005, when there was a rush to beat the Oct. 17 deadline, filings have not topped that 2004 figure and in 2012 totaled 1.2 million cases. Others attribute the decline in filings to the pullback by the credit markets to extend credit to risky clients, giving fewer people credit to default on.
Many people who filed before the law changed in October 2005, may have suffered a job loss, foreclosure or another economic hardship that has put them in the position to file, again. Back in 2005, the economy was much different than it is today. Due to their previous filing, they have been unable to file- until now!
Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Related Resources:
http://www.toledoblade.com/Economy/2013/10/06/At-8-insolvency-reform-act-falls-short-of-goals.html
