On October 17, 2005, the most significant revision to U.S. bankruptcy law in a generation took effect. If you followed the media’s coverage of the new law before it became effective, you could easily have assumed that the changes were aimed only at consumers filing bankruptcy to get rid of credit card debt. There is no question that the new law, called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (bankruptcy lawyers just call it BAPCPA), was aimed at, and affects most significantly, individual consumers. David L. Rosendorf of Kozyak Tropin & Throckmorton, P.A., in conjunction with the American Bankruptcy Institute, maintains an entire blog devoted to the new law’s changes and how it is being implemented. His blog has a natural focus on those consumer changes.
However, the surprising news is that the new bankruptcy law changes also contained a host of provisions that will affect businesses. Many bankruptcy lawyers (this one included) think the law will make it more difficult for some businesses to reorganize, which could end up reducing recoveries for unsecured creditors. That said, other provisions in the new law benefit certain unsecured creditors. For an overview of how the new law will affect businesses and their creditors, look here or here — and stayed tuned.