The Bankruptcy Reform Act of 2005 established significant limitations on the ability of consumers to pursue a Chapter 7 bankruptcy. These restrictions included the types of debts consumers are able to discharge in this type of bankruptcy. Additionally, the law imposed a more stringent time frame on filing future Chapter 7 bankruptcies.

History

Before the enactment of the Bankruptcy Reform Act of 2005, a consumer was able to file a Chapter 7 bankruptcy an unlimited number of times. Moreover, a consumer theoretically could file a new case every five years.

Function

The stated function of the Bankruptcy Reform Act of 2005 is to make consumers more financially responsible. The objective is the Act is to markedly limit the number of consumers who take advantage of Chapter 7 bankruptcies.

Time Frame

Under the Reform Act, a consumer is able to file a Chapter 7 bankruptcy an unlimited number of times. However, the consumer must wait eights years after a discharge in such a case before filing a new case.

Misconceptions

Many misconceptions about the new bankruptcy law remain. These include the belief that a consumer can file one Chapter 7 bankruptcy after another without an extending waiting period between cases.

Warning

Even if the waiting period set forth by law is expired, a consumer seeking to file a successive Chapter 7 bankruptcy is best served hiring a lawyer. Bankruptcies are complicated cases, particularly when a consumer is seeking this type of relief multiple times.

Source:

U.S. Bankruptcy Code

U.S. Court, Resources

Bankruptcy Law Network, When can I File Bankruptcy Again?