Legislation act that dramatically changed the federal bankruptcy law in the United States. The act sets forth a number of tests that a consumer seeking to file bankruptcy must pass before permission is granted. This act gives creditors the ability to have a Chapter 7 filing dismissed or changed to a Chapter 11 or 13 if the debtor exceeds certain median income levels determined by the state the debtor resides in. If the debtor exceeds the median level of income, they will be required to pay debtors back over a certain period of time determined by the court system.

Copyright©2009 by InvestorWords.com. ALL RIGHTS RESERVED.

Reproduction of all or part of this glossary and/or this page, in any format, without written consent is prohibited. If you have questions about this dictionary please feel free to contact us feedback\@\investorguide.com