On April 20, 2005, President Bush signed The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The bill represents the most sweeping re-write of U.S. bankruptcy laws in a quarter-century. Credit card companies and banks have been pushing for the new laws for the past eight years and have spent over $250 million in lobbying efforts. The new bill will make it much more difficult and expensive to erase obligations in bankruptcy.
IMPORTANT: The new laws will not take effect for 180 days following President Bush's signing of the bill. If you file within this 180-day period, the present, debtor-favorable bankruptcy laws will still be applicable. File before October 17, 2005 to ensure you will qualify for bankruptcy relief.
The new laws were literally written by the credit-card industry and fail to restrain aggressive marketing and high rates charged by credit card issuers. Credit card companies will be permitted to continue business as usual; i.e., entice vulnerable customers to extend their balances, then nail them in the fine print. The new bankruptcy laws are expected to be especially hard on low-income working people, single mothers, minorities and the elderly, and will remove a safety net for those who have lost their jobs or face mounting medical bills.