Is there anything good for debtors under the new bankruptcy law?

For debtors, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is a grim law, indeed. It is more difficult, expensive, and burdensome to file for bankruptcy. However, there are some small, bright spots for debtors. First of all, bankruptcy courts can impose debt reductions of up to 20 percent on unsecured creditors who don’t cooperate with consumer credit counseling agencies’ efforts to negotiate payment plans with those creditors; a court can force this 20-percent reduction of principal on unsecured creditors if they refuse an offer from a debtor through a consumer credit counseling agency, offering to pay 60 percent of the debt due if the plan is proposed within 60 days of filing a bankruptcy petition. Second, retirements plans are not included in bankruptcy as an asset for creditors. Finally, the new bankruptcy law gives child support obligations top priority over all other unsecured claims. Now, debtors in Chapter 13 must pay back all child support arrears before their bankruptcy can be completed or discharged.