How does the Bankruptcy Abuse Prevention and Consumer Protection
Act (BAPCPA) affect dischargeable debts?
The BAPCPA gets tough on discharges of debt for persons filing bankruptcy by expanding categories of exceptions to discharge. One area in particular the BAPCPA addressed was credit card usage. Previously under section 523(a)(2)(C), a charge on a credit card for a single item of over $1225 made within 60 days of filing for bankruptcy was considered fraudulent or 'luxury' purchase and therefore not dischargeable. The BAPCPA reduced the dollar amount to only $500 for a single item, and extended the time limit to 90 days. What is more, the BAPCPA changed §523(a)(8) to address dischargeability of educational loans without proof of "undue hardship." The type of loan and nature of the lender no longer matter and some loans that are "for-profit" or "non-governmental" entities are not dischargeable any longer.
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The BAPCPA gets tough on discharges of debt for persons filing bankruptcy by expanding categories of exceptions to discharge. One area in particular the BAPCPA addressed was credit card usage. Previously under section 523(a)(2)(C), a charge on a credit card for a single item of over $1225 made within 60 days of filing for bankruptcy was considered fraudulent or 'luxury' purchase and therefore not dischargeable. The BAPCPA reduced the dollar amount to only $500 for a single item, and extended the time limit to 90 days. What is more, the BAPCPA changed §523(a)(8) to address dischargeability of educational loans without proof of "undue hardship." The type of loan and nature of the lender no longer matter and some loans that are "for-profit" or "non-governmental" entities are not dischargeable any longer.
