How do the changes made to bankruptcy law in 2005 affect my decision to file for bankruptcy?

In April 2005, President George W. Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This Act is the first substantial change in bankruptcy law for more than 25 years. According to the bill’s framers, the legislation is aimed at preventing consumers from abusing bankruptcy laws. Meanwhile, consumer advocates argue that the bill merely assists creditors, especially credit card companies, in their collection of debt. Regardless of its purpose, the new law makes numerous changes that will affect consumers wishing to file bankruptcy.  

The 2005 law made a variety of changes in bankruptcy law, so things you had always heard about how bankruptcy works may no longer be true. The new law includes some significant changes: 

•stricter income requirements for filers for both Chapter 7 and Chapter 13 bankruptcies, so fewer people will qualify; 
•required fiscal management classes before filing permitted, delaying the relief of bankruptcy; 
•increased costs associated with increased obligations and paperwork for bankruptcy attorneys; 
•fewer kinds of debt are eligible for bankruptcy relief, so bankruptcy filers will still owe them; 
•allowable amounts for living expenses permitted for Chapter 13 filers are now dictated by regulation rather than actual, possibly higher costs; 
•homestead exemption amounts, which currently vary widely from state to state, are limited; 
•less protection from creditors, because there is no longer an automatic stay for evictions, for actions against various licenses, or for certain family law actions; 
•harder for some Chapter 13 filers to keep their cars. 

For more information, see: 11 U.S.C. §§ 101-112 (2015); Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Public Law No. 109-8 (2005); FindLaw, New Bankruptcy Law: 2005 Bankruptcy Law Changes, (last visited June 10 , 2015).