Definition
The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) reformed the bankruptcy process so that debtors would be less able to liquidate their debt through Chapter 7 bankruptcy.
Analysis
BAPCPA was signed into federal law in 2005. Consumer groups opposed the legislation, while big banks heavily lobbied for its passage.
The most substantial changes made by BAPCPA include:
- Means test for Chapter 7–this excludes debtors earning more than the median income where they reside
- Required bankruptcy counseling–debtors must complete a counseling session with an approved budget and credit counseling agency
