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Tough new US consumer bankruptcy law takes effect

[JURIST] After being signed into law [JURIST report] by President Bush last April, an overhauled US bankruptcy law goes into effect Monday making it more difficult for consumers to prove that they should be allowed to clear their debts and make a "fresh start." The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 [PDF text] was prompted by concerns that an increase in personal bankruptcies was adversely affecting retail stores, banks and credit card companies who had to pick up the tab after consumers became insolvent. The changes make it harder for debtors to cast aside credit card and other debt by filing under Chapter 7 [text], the most common type of personal bankruptcy, which currently allows consumers to wipe out most of their unsecured debts. AFP has more.


 Op-ed: Rebalancing the Bankruptcy Code

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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