Bankruptcy Amendment Aims at Abuse of Debt Program

We’ve all heard about people keeping their palatial estates while discharging their debts through bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which went into effect two weeks ago, might change that.

Under the new law, an individual must obtain counseling from an approved nonprofit agency before filing for bankruptcy. The client also must produce a certificate verifying that he or she has completed counseling. In addition, someone seeking bankruptcy protection will have to complete a personal financial management education course before the court will discharge debts.

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