The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 also known as BAPCPA in short, was enacted in 2005 on 20th April. This is a legislative act which has made various crucial changes to US Bankruptcy Code. It is referred as the “New bankruptcy Law.” According to the act, filing bankruptcy by the consumers has been made even more difficult under the Chapter 7.

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed and signed into the law by the then president George Bush. Most of the provisions of this act apply to those cases which are filed on or after the 17th October 2005. At that time, it was summoned as the greatest victory of the banking lobby. This act is also considered as the most important legislative change to the personal finance when passed by the US Congress. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made sweeping alterations to the laws of American bankruptcy while also affecting business bankruptcies as well as the consumers.

A lot of provisions of the bill were designed especially by congressional sponsors in order to turn it into something that will make filing for bankruptcy more difficult for the people. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was designed in order to make it difficult for the debtors to file Chapter 7 Bankruptcy which allows them to be forgiven from their debts. The act requires instead filing Chapter 13 Bankruptcy under which debts incurred by the people are discharged only when the debtor repaid some part of his debt.

Therefore seen from various perspectives, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is an important legislative change in America.