Although many people do not ever wish to have to file for bankruptcy, unfortunately some people do take advantage of filing for relief of their debts. These people may file for bankruptcy seeking debt relief before investigating other alternatives, and this can cause a few difficulties and back-ups for those involved in the case. This can also make it potentially more difficult for those people who really need to do so to file. For this reason, people have experienced changes under a new act that has been passed.
The official title of the Act is the Bankruptcy Abuse and Consumer Protection Act. This Act was passed in 2005, with changes going officially into effect in late 2005. The act was passed by several prominent politicians in order to make filing for certain types of bankruptcy more difficult. For example, the Act is intended to make it more difficult for people to be able to file under Chapter 7 bankruptcy, which includes the liquidation of the person or company’s assets. The assets will then be divided and sold among the people or companies to whom the individual or business has debt.
Also, people or businesses who wish to file under Chapter 13 bankruptcy will also have a more difficult time. They may be required to have additional income counseling or to have received this counseling before they are allowed to file. This may prevent unnecessary cases of bankruptcy or may prevent them from happening again. The Act may also limit a person or company’s protection under the chapters as well as make the person’s counsel more liable for his or her client’s proceedings or choices.While this Act may seem to be somewhat of an impediment, its goal is to make the bankruptcy process a bit more difficult so that people who do not necessarily need to file for bankruptcy will be discouraged from doing so. This may make it easier for people who do need to file to do so while also clearing up the court system for others.