On April 20, 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. It is referred to in this booklet as the "New Law." It took effect on October 17, 2005. This legislation was designed to eliminate perceived abuses in the bankruptcy system. Among other things, it seeks to require debtors who can pay some, but not all, of their debts, to file Chapter 13 bankruptcy as opposed to discharging their debt in full in a Chapter 7. This was the first substantial change in the Bankruptcy Code since it was enacted 30 years ago.

The media has reported that the New Law will make debt, or certain types of debt, impossible to discharge. Some have even indicated that the New Law will eliminate the availability of bankruptcy relief for a vast number of people. For the most part, this is just not the case.

The New Law certainly will make filing for bankruptcy tougher and more time-consuming. The Debtor and the Debtor's attorney have been given additional duties within the system, but the basic system itself remains intact. These additional duties, and risks, will most certainly result in an increase in the effort and cost to get financial relief. How this will all play out remains to be seen.