The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act Essay

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act - Essay Example The act implemented ways to make the process of filing for bankruptcy very long and costly in order to reduce the number of people filing for bankruptcy. People filing for bankruptcy undergo credit counselling intended to change their minds on filing for bankruptcy (Scott 2005). Later, those proceed to file for bankruptcy undergo means test to evaluate and determine their need and eligibility to file for bankruptcy. The establishment of this act has therefore worked to improve the cases filed on bankruptcy. This is because anyone who puts any file on a bankruptcy gets an opportunity to undergo credit counselling. With this counselling companies and individuals are able to have a clear analysis of their budges to avoid bankruptcy (Scott 2005). In that case, when individuals have critically well analysed and established budgets, they will be a position to have an insight of their ability to file for bankruptcy. This therefore eliminates the filing of bankruptcy by consumers without clear understanding of their ability to pay back their debts. Provision for counselling also helps people to plan on the options they have on paying their debts. These also provide a consideration of the available methods of paying back debts which can either be the priority of debts subject to the prevailing rate of interest or the consolidation of debts (Carroll 2007). After all this analysis, individuals will then be at their own free will to whether to file for the bankruptcy as they initially intended or to avoid it completely. On most cases, people who file for bankruptcy are very desperate for money. In that case, taking them through bankruptcy does not amount to any use at all. Individuals go ahead to file for bankruptcy in a financial state of dire need. After the counselling they proceed to file for the bankruptcy. This therefore is almost