The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) changed many aspects of how bankruptcy works. It created the means test, tax-based proof of income requirements, credit and debt counseling requirements, and curtailed some of the powers of the automatic stay.

The Chapter 7 means test generally applies to individuals with primarily consumer debts. Income above the applicable state median for the household size does not, by itself, rule out Chapter 7. The calculation also considers allowable expenses and certain debt payments to determine whether a presumption of abuse arises. A presumption may be rebutted in qualifying special circumstances, and other eligibility and abuse-review rules still apply. Chapter 13 is not automatically the only option for an above-median-income debtor. Sources: 11 U.S.C. § 707(b)(1)–(3), (7).

The BAPCPA also created the requirement that you must show proof of your income using tax returns from the past year. This means that bankruptcy protection will be more difficult to obtain for those who are behind on their taxes. You can still file, however, you will be required to get current on your taxes before your case can proceed.

Individual Chapter 7 and Chapter 13 debtors generally must complete credit counseling from an approved agency within 180 days before filing. A separate debtor education course is generally required after filing and before a discharge can be granted. Limited exceptions apply, and the required completion certificates must be filed with the court. Ask the approved provider about fees and any available waiver. Sources: U.S. Bankruptcy Court for the Western District of Washington: credit counseling and debtor education; U.S. Trustee Program: counseling and education requirements.

Finally, the BAPCPA eliminated some protections from the automatic stay granted in bankruptcy. The automatic stay halts collections activity during the course of your bankruptcy case, including disconnection of vital services like power or water, foreclosure, or repossession of a vehicle. In 2005, some of these were eliminated, including protection from evictions, driver’s license suspension, legal actions for child support and divorce proceedings.

Over the past 34 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can review whether bankruptcy may help stop your garnishment and address your debts through a repayment plan. Sources: 11 U.S.C. § 362(a)–(d); U.S. Courts: Chapter 13 bankruptcy. If money has already been garnished, recovery may be possible in some cases, depending on the timing of the transfers, applicable exemptions and other legal requirements. A refund is not automatic or guaranteed. Sources: 11 U.S.C. § 547(b)–(c), (e)–(g); 11 U.S.C. § 522(g)–(i); 11 U.S.C. § 550(a). But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.