Boston Bankruptcy Attorney

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed by Congress and signed into law by President Bush on April 20, 2005. It applies only to cases filed on or after October 17th of 2005. Since its creation, the Act has become known as BAPCPA. BAPCPA amends the bankruptcy code by adding new responsibilities for debtors.

Tax Provisions in BAPCPA

Under the new law, if a debtor fails to file a tax return that becomes due after the date of the bankruptcy petition, the IRS can request that the court convert the case from one type of bankruptcy to another. This can mean converting from a Chapter 7 bankruptcy case to a Chapter 13 case.

Part of the tax provisions include providing trustees a copy of the debtor's most recently filed federal tax return or a transcript of the return. Copies of amendments to returns and any past due returns filed while the case is pending must also be filed with the court. If the returns or transcripts are not filed, a Chapter 7 discharge will not be granted, while a Chapter 13 plan may not be confirmed.

The "Means Test"

Also under this law, a "means test" was developed for use by those who wish to discharge their debts under Chapter 7 bankruptcy. This test requires that debtors who meet certain income tests make regular payments on their debts under a Chapter 13 plan, rather than a Chapter 7 discharge.

The new law also requires debtors to undergo credit counseling at their own expense.

Overall, BAPCPA requires debtors comply with tax-filing responsibilities, make available previously filed tax returns, and seek credit counseling services.

Contact a Boston Bankruptcy Lawyer

For more information on the Bankruptcy Abuse Prevention and Consumer Protection Act, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346 today.