The new bankruptcy reform law, known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), went into effect on October 17. Among key provisions are the new requirements that, for the first time, consumers must participate in:

1. credit counseling, individually or in a group briefing, provided by an approved non-profit budget and credit counseling agency within 180 days prior to filing for bankruptcy.
   
   
2. financial education session ("pre-discharge debtor education") before your Ch. 7 or Ch. 13 bankruptcy is discharged.
   

ByDesign is approved to issue certificates [evidencing completion of a personal finance management course] in compliance with the Bankruptcy Code.* We provide both the required pre-bankruptcy counseling and the pre-discharge debtor education to consumers in California who wish to file for Chapter 7 or 13 bankruptcy.

For more than 40 years, our mission has been to educate consumers on how best to manage their money and to get out of debt. With this experience, we are well-qualified to continue our educational efforts with people who seek to file or obtain a discharge from bankruptcy.

Other changes to the bankruptcy law from Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 include:

1. Means Test: If the debtor’s income is greater than the state median income, they may not be eligible for Chapter 7.
   
   
2. Homestead Exemption: A debtor may only exempt up to $125,000 of interest, and in some cases less based state-specific caps, in a homestead that was acquired within the 1,215-day period prior to the filing although the calculation of that amount does not include any equity that has been rolled over during that period from one house to another within the same state.
   
   
3. Domestic Support Obligations: Domestic support obligations are a first priority in distribution. Support owed to a former or current spouse or child is given priority over support obligations that have been assigned or owed directly to a governmental entity.
   
   
4. Non-discharge of Student Loans: In addition to government student loans, student loans to for profit and non-governmental agencies are not dischargeable.
   
   
5. Non-discharge of Recent Debt: Debts owed to a single creditor totaling more than $500 for luxury goods incurred within 90 days of filing are presumed non-dischargeable; cash advances of $750 within 70 days are also non-dischargeable.
   
   
6. Treatment of Auto Liens: Under Chapter 13 bankruptcy, where the creditor holds a security interest in a motor vehicle purchased within 910 days of the filing, a secured creditor can retain their lien on a vehicle until the payment of the entire debt, not just the secured portion.
   
   
7. Time between bankruptcy filing: Chapter 7 debtors can file only once every 8 years (was 6 years previously).

ByDesign™ is not permitted to provide legal advice. Consult your attorney should you seek legal advice.

*Approval does not endorse or assure the quality of a Provider's services.