The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed into law by President Bush in April 2005, took effect on October 17, 2005. Some key changes resulting from this new bankruptcy law include Mandatory Credit Counseling, Stricter Eligibility for Chapter 7 Filing, Tax Returns and Proof of Income, and Fewer Automatic Stay Protections for Filers.

Bankruptcy can be expensive. In addition to filing costs and attorney fees, a notation that you filed for bankruptcy will remain on your credit report for seven to ten years, depending on the chapter you file.

This could make it difficult to obtain any type of new loan. And, if you are able to obtain new credit, it may be hard to find a loan with affordable interest rates and repayment terms.

Filing Bankruptcy can have serious consequences. Learn about bankruptcy, consider simpler alternatives, make sure you are eligible, and consider what will happen to your home.

Things may not be as bad as you think. Bankruptcy won't relieve you of your obligation to pay your mortgage, but it might make your mortgage easier to pay by getting rid of other debts.

Bankruptcy does not relieve all debts. Debts not dischargeable generally include back taxes less than three years old, student loans, alimony, child support, and debts incurred through fraud.

Bankruptcy affects more than your credit. Besides the obvious emotional issues involved with filing bankruptcy, it can also affect your ability to rent an apartment or obtain affordable insurance. In some fields, a bankruptcy could adversely affect your ability to gain employment or promotions.

Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidations" or "reorganizations."