Bankruptcy law was passed after realizing the need to have an effective system by which an honest debtor, who couldn’t pay the staggering debts he owed to his creditors, could get an opportunity to begin his life again with dignity and self-respect.
It also proved beneficial to society as a whole.
After being first passed in 1898, the U.S. Bankruptcy Law was revised many times, mainly in 1933, 1934, 1938, and 1978.
Bankruptcy Abuse Prevention and Consumer Protection Act
While other laws are essential, too, noteworthy amongst them is The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which passed in the year 2005 after a lot of debate and resistance.
The new regulations in BAPCPA are complex and favor the credit industry.
BAPCPA made extensive changes in the system by making a bankruptcy filing expensive for individuals and businesses and cutting down on the benefits previously offered.
Bankruptcy filing, discharging debts, and repeat filing for bankruptcy became difficult for BAPCPA. But, on the other hand, fees for filing and the requisite paperwork increased.
Read about eight rules regarding bankruptcy filing
BAPCPA intended to offer lower interest rates to banks and credit card companies, and they, in return, would lower their fees and interest rates, benefiting them and their consumers.
Sadly, that hasn’t happened.