Bankruptcy Abuse Prevention And Consumer Protection Act - BAPCPA

In 2005, the BAPCPA was passed to create stricter standards for examining a consumer's ability to repay some of their debts when filing for Chapter 7 bankruptcy. If, under the act, it is determined that the applicant earns enough money, they can be forced to file Chapter 13 instead, which is a reorganizational bankruptcy, and does not discharge as many debts as Chapter 7.

The means test instituted by the BAPCPA will first compare the applicant's monthly income to the median income in their respective state, then provide allowances for both assumed and actual monthly expenses. If, after living expenses are covered and the applicant exceeds the allowable monthly income, their request for Chapter 7 will typically be denied and they will be given a Chapter 13 instead. There clearly should have been an 800 number the borrower could have called late at night to have a talk about this situation.