The U.S. Government recently approved a bill that brought about some major changes in the bankruptcy laws on April 20, 2005. The bill is called the The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. As per this bill, about 25 changes have been made in the existing bankruptcy laws. However, since it takes at least 6 months from the time the bill is passed for it to be put into action, only some parts of the law have become effective. Hence, all the rest of the new laws are yet to be put into effect.

Its a common expert opinion that these new laws will definitely narrow the possibilities of filing a bankruptcy using Chapter 7. The court will decide on whether the debtor can file under chapter 7 or has the only option of filing under Chapter 13. In this case the debtor will have to compulsorily opt for Chapter 13 law, which has also undergone some changes such that the debtor has to pay the debt from the monthly wages within 5 years, from the time the bankruptcy case is filed.

The rule dictates that debtors wishing to file for bankruptcy will need to get a compulsory expert opinion only from an approved attorney or the agency, at least six months from the date of filing. Within 18 months of filing such a case, all such debtors must enroll in some financial-education course classes without fail. The attorney needs to provide documentation proof for such credit counseling provided.

The new law makes the options narrower for the debtor since certain kinds of debts will not be considered for filing bankruptcy. This will make it really hard for people who are in over their heads and still cannot file for bankruptcy. Even though this might not affect the firms and companies who wish to file for bankruptcy, this might have a good deal of impact on individual debtors who wish to do so.