When a person files for Chapter 7 bankruptcy, the majority of their debts are discharged or absolved, allowing them to """"reset"""" their financial situation and start over. The BAPCPA was designed to compel more individuals to file for Chapter 13 bankruptcy, which generally requires payment of at least a portion of most debts. The new bankruptcy condition was clearly influenced by the financial lobby.
Under the BAPCPA, also referred to informally as the ""New Bankruptcy Law,"" Chapter 7 filings are subject to a number of new, stringent provisions. One of the most significant changes is that a Chapter 7 filing may be converted or dismissed if there are indications of """"substantial abuse"""" and the debtor has primarily consumer debt. The individual's bankruptcy petition may be considered abusive if they fail a """"means test"""" that confirms their income is below the median.
Other provisions of the BAPCPA include an eight-year waiting period between Chapter 7 debt discharges, credit counseling requirements, new discharge exceptions, and stricter lien avoidance standards. In addition, the U.S. Bankruptcy Code included new rules for debtors notifying creditors of a bankruptcy filing and restrictions on the exemptions under which a debtor's property was protected.
With these significant changes to the provisions for Chapter 7 bankruptcy filings explicitly making it """"more difficult for people to file for bankruptcy,"""" it is more essential than ever for those contemplating bankruptcy to consult with an experienced attorney. While it is true that some individuals violate the Bankruptcy Code, it remains the best option for a large number of individuals in financial distress. Consequently, the BAPCPA has been heavily criticized by consumer advocacy organizations, bankruptcy judges, and financial law scholars.
Visit the website of New Orleans bankruptcy lawyers Kervin & Young, LLC, for more information about Chapter 7 bankruptcy.
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