The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

• The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) expanded the waiting period to file for another Chapter 7 bankruptcy from six to eight years. The passing of BAPCPA made it necessary for debtors seeking to file under Chapter 7 to meet certain eligibility requirements under a "means test." Under the means test, a debtor must bring home less income than the median income level in his state and not have an additional $100 per month to pay in debt payment. If either requirement is not met, the debtor must file under Chapter 13, which is a debt reorganization plan. A debtor must wait four years from the discharge date of a previous Chapter 7 filing to file a Chapter 13 bankruptcy.
  
  

Tax Returns

• A debtor must provide federal tax returns from the previous tax year to file a Chapter 7 or Chapter 13 bankruptcy. If a bankruptcy filer has not paid taxes for the previous tax year, he cannot file for bankruptcy until his tax obligation is paid. The federal government will not waive this requirement under any circumstance.
  
  

Eligibility Requirements

• A debtor seeking to file another bankruptcy must meet all federal eligibility requirements. According to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCP) of 2005, a debtor must complete a government-approved credit counseling program six months before filing for bankruptcy and complete a financial management education program after bankruptcy proceedings end. Failure to complete either program will result in a judge refusing to discharge the debtor's debts.
  
  

Warning

• Debts are not always discharged through bankruptcy. For example, if a debtor purchases one or more high-value or luxury assets in the months before filing for bankruptcy, a judge may deny the bankruptcy petition on the grounds that the bankruptcy claim is fraudulent, which could result in fines and/or jail time. The court-appointed trustee overseeing the bankruptcy case will analyze the purchases and make a determination.