Filing Bankruptcy? The New Law Went Into Effect Eight Years Ago


Eight years ago, the BAPCPA of 2005 went into effect. It’s not like this was a nostalgic event, but it changed the way that Americans file for bankruptcy. Not only did it change the way, but it made it much harder to file Chapter 7 bankruptcy. It seems like it was not long ago when Americans did not have to take a means test to qualify to file Chapter 7 bankruptcy. Seven years has blown past and now it is the norm. The only difference is most people who wouldn’t qualify to file Chapter 7 back in 2005, now easily qualify because the economy is in the tank. There is some good news here for those that are struggling financially and filed back in 2005, depending on the date of the bankruptcy filing, they will be able to file it again after eight years from the date of filing. It’s not when the individual got the bankruptcy discharge or if there were delays in the process that drug it out late into 2006, it’s the date the bankruptcy petition was filed with the bankruptcy court.

I don’t think Congress would’ve amended the bankruptcy code back in 2005 if they knew what was to come with the economy. Unemployment is still close to 8% and Americans are struggling to make ends meet. The average gas prices are now close to four dollars and it doesn’t seem like it will be going down anytime soon. Prior to the bankruptcy code changing, many people rushed in to get their Chapter 7 bankruptcy filed before the changes took effect. They wanted to be able to wipe out all their unsecured debt while they could still qualify. Initially, the number of those filing bankruptcy dropped drastically in 2006 and slightly increased in 2007. It was 2008 when the wheels fell off of the economy and many Americans rushed in once again to file. During this time, the best job in the world was that of a bankruptcy attorney.

Currently, numbers have once again subsided, but many are wondering if this is the calm before the storm. Now that the war drums are once again beating, many fear another big downturn in the economy. Usually when a country is unstable or indecisive, gas prices and other commodities take a big jump and consequently the economy takes a huge hit. Many people were hoping that things were getting better and we would soon exit the recession. It now appears that people should once again be taken the time to educate themselves about filing bankruptcy if they are overwhelmed with debt.

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