Filings Tumble Following Bankruptcy Reform


In the first full year the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was in effect, bankruptcy filings fell 70% to 617,660, the lowest number since 1988.

Filings involving business debts totaled 19,695, down 50% from almost 40,000 in 2005, while non-business filings dropped 71%, from more than 2 million in 2005 to 597,965.

BAPCPA established a needs-based formula that determines whether debtors are eligible to file under Chapter 7 (where all unsecured debts are generally discharged) or should be converted to Chapter 13 (where at least a portion of debts are paid). The test resulted in a 78% decline in Chapter 7 filings.

Other consumer and commercial bankruptcy provisions of the act are available at the AICPA’s Personal Financial Planning Center at http://pfp.aicpa.org.

Source: www.uscourts.gov.

FEATURE

Tackling TCJA changes this tax season

Return preparers must be ready for how the Tax Cuts and Jobs Act has modified many common features of individual and business returns.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.