Sample Law Case Study Paper on The Bankruptcy Abuse and Prevention and Consumer Protection Act of 2005

Filing for bankruptcy potential was a norm that was adopted by a vast majority of people who were under a certain debt repayment plan. According to a research study that was done in the year 2004, approximately 4.5 million people had already filed for a personal bankruptcy protection during the years between 2001 and 2004 (White 175). The number of people filing for a bankruptcy protection continued to escalate at a rapid rate. Individuals who filed for bankruptcy usually qualified for either Chapter 7 bankruptcy or Chapter 13 form of Bankruptcy (Ruser 88).  Chapter 7 bankruptcy differed from Chapter 13 Bankruptcy.  However, on April 20, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was enacted to address some of the vital factors contributing to soaring cases of personal bankruptcy filings (Caroll 3). Signed by the then President of the United States, George W. Bush, the Bankruptcy Abuse Prevention and Consumer Protection Act introduced certain valuable requirements that were needed to be fulfilled by the debtors interested in filing for their own bankruptcies.

 The signed BAPCPA Act finally became effective and functional in October 2005. So far, BAPCPA has proved to be the most effective and efficient way that would deter debtors from filing for bankruptcy (Ruser 86). The BAPCPA has more so prevented the common trend of fraudulent bankruptcy filings. Before the establishment and enactment of the BAPCPA law, a vast majority of people inclusive of corporations would always turn to bankruptcy system whenever they would fall and fail to clear their debts. Filing for bankruptcy seemed to be the only way through which the debtors would get a sigh of relief from being constantly reminded to pay their debts. It was with this profound reason that the bill on Bankruptcy was signed to prevent cases where the debtors would want to be relieved from their responsibility of paying up their debts. This new bill specifically amends Title 11 of the United States Code (White 165).                                                                                              

BAPCPA has also played an eminent role in deterring people from qualifying for Chapter 7 bankruptcy as opposed to the Chapter 13 bankruptcy. Thus, the BAPCPA created an emphasis on Chapter 13 bankruptcy where the debtors are given the chance to pay off their debts on a well-scheduled repayment plan (Ruser 87).  Through this, a debtor would only be required to pay her debts within a period span of 3-5 years. In addition, the debtor was required to attend a credit counseling and financial management course before he/she was deemed to qualify for bankruptcy filings. It was compulsory for debtors to attend that course and get a certificate which would act as a necessary proof of qualification for filing for bankruptcy. A debtor is therefore

“and notwithstanding any other provision of this section, an individual may not be a debtor under this title unless such individual has, during the 180-day period preceding the date of filing of the petition by such individual, received from an approved nonprofit budget and credit counseling agency described in section 111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis” (Caroll 125).

Although the new Act bars a lot of people from accessing the bankruptcy filings is constitutional as it helps in reducing the cases of the debtors fraudulently and filling for bankruptcy.  However, the constitution only allows the Congress contribute in amending the existing laws regarding bankruptcy filings. The courts are however in charge of introducing new laws after the Courts had been represented with a case. The Congresses are only allowed to assess the impacts of the newly enacted BAPCPA.

“It is the sense of Congress that the Secretary of the Treasury has the authority to alter the Internal Revenue Service standards established to set guidelines for repayment plans as needed to accommodate their use under section 707(b) of title 11, United States Code” (Caroll 136).

In conclusion, I feel that the ethics of bankruptcy does not fully consider those who are helpless and unable to pay the debt. I also consider it ethical to the debtors to pay the creditors in a given agreed time frame. This is because, today, more emphasis has been put for people to choose Chapter 13 bankruptcy besides attending for the credit counseling course.  This process assures the creditors their money being fully repaid by the debtors.

References

Ruser, Rachel. “Analysis Of The Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005 (BAPCPA).” SPNA Review 2.1 (2006): 6.

Carroll, Stephen J. The Effects of the Changes in Chapter 7 Debtors’ Lien-Avoidance Rights Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Santa Monica, CA: RAND, 2007. Print.

White, Michelle J. “Bankruptcy reform and credit cards.” The Journal of Economic Perspectives 21.4 (2007): 175-199.