The Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, has restructured and restricted many of the basic standards of bankruptcy in the United States. However, as these rules have created a bankruptcy code that is more exclusive than under prior code iterations, there remain important exemptions to each of the major additions made under BAPCPA. In particular, the means test, which is perhaps the strongest addition to the national bankruptcy code, has a few exemptions permitted for those debtors in specifically enumerated situations.
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Non-consumer debt is a major source of exemptions when working through the means test. Although this does not help the common debtor, who has perhaps incurred expensive credit card debt or home mortgages, some individuals may benefit from this exemption, considering that debt based on personal taxes may count as business or non-consumer debt. If this form of debt makes up over half of a debtor's overall debt, the court may allow the means test to be waived.
The law also provides exemption from the means test for veterans who are disabled and fell into their current debt while they were on active duty. The law creates specific standards for who may qualify for these exemptions, setting certain disability standards for veterans to meet as well as defining active duty and homeland defense activity to narrow down the total number of people benefiting from this exemption program.
While these exemptions do not necessarily make bankruptcy a lighter burden in terms of the actual task of reducing debt, passing through the process without the means test eliminates the costly amount of time and potential legal quarrels that can arise as a part of this new requirement. To learn more about other exemptions along the BAPCPA-based bankruptcy process, contact a bankruptcy attorney.
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