The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) revised the process of getting a fresh start when you are overwhelmed by debt. The major provisions in this law include;
Mandatory credit counseling before filing
Stricter eligibility for Chapter 7 filing to encourage Chapter 13
Fewer debts discharged and fewer state exemptions
Tax returns and proof of income required for means test
Mandatory five-year Chapter 13 plan if over your state's median income
Mandatory financial management education after filing
Time between Chapter 7 filings increased to eight years
Bankruptcy was designed to give you the ultimate protection of the courts from your creditors. The process can be as effective as it is damaging to your credit, and you should use it with great care, and only if you've already considered less damaging courses of action.
Is Bankruptcy Right for You?
Be sure that bankruptcy will solve your financial crisis.
Understand bankruptcy's effects on your goals.
Consider all your options.
Talk to a good credit counselor.
Get a professional legal opinion.
Talk to your creditors.
Consider the stiffer consumer rules in the Bankruptcy Abuse Prevention and Consumer Act of 2005.