2005 Bankruptcy Reform Act
The 2005 Bankruptcy Reform Act becomes effective October 17, 2005, making it more difficult for individual consumer debtors to obtain relief from their financial problems under Chapter 7 or Chapter 13 of the Bankruptcy Code. Major Intent of Bankruptcy Reform: The major intent of bankruptcy reform is to require people, who can afford to make some payments towards their debt, to make these payments, while still affording them the right to have the rest of their debt erased. These people must file Chapter 13. Status of the Bills: The Senate passed the Bill on March 11, 2005 and the Congress on April 14, 2005. When will this be Law: The bill was signed into law by the president on April 20, 2005. Sections 308, 322 and 330, all concerning the homestead exemption, take effect immediately. This is law now: The exemption is limited to $125,000 if the property was acquired within the previous 1215 day (3.3 years). The cap is not applicable to any interest transferred from a debtor's pr...