Whenever a law is overhauled, there are changes to be explored and understood. Few changes, however, are as sweeping as those found in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Although the Act became law in April, it goes into affect today, October 17, and many professionals are still working to grasp all the implications.
To assist professionals in understanding the largest overhaul of the Bankruptcy Code since 1978, CCH offers a book resource Bankruptcy Abuse Prevention and Consumer Protection Act of 2005; Law and Explanation. The book includes the full text of the legislation, a table of statutes added or amended by the Act, a table of effective dates, selected legislative committee reports, other legislative history and a CCH explanation of the provisions in the Act. The approximately 400 page book is divided into 14 chapters including a specialized treatment of the legislation’s tax provisions authored by tax expert Kenneth C. Weil. A single copy is $57 and available from onlinestore.cch.com/default.asp?ProductID=3216 the CCH Online Store. In addition, CCH offer the Bankruptcy Law Reporter providing up-to-date information needed to navigate the bankruptcy law maze and is updated bi-weekly.
Another useful resources is 2005 Bankruptcy Revisions: Implications for Businesses and Financial Advisors a best-selling book from the American Institute of Certified Public Accountants (AICPA). Focusing on the financial and tax aspects of the new bankruptcy law, this concise book is an excellent resource for CPAs, small business consultants, financial managers and advisors and legal consultants. Each chapter was written by bankruptcy experts including CPAs and attorneys. The book’s editor, Grant Newton is a leading authority on bankruptcy. AICPA members can purchase their own copy online for $35 from www.cpa2biz.com.
The federal income tax implications of bankruptcy are also covered in Publication 908 from the Internal Revenue Service (IRS). This publication, intended for individual, partnership and simple corporate bankruptcies, does not provide detailed discussions of the tax rules for more complex corporate bankruptcy reorganizations nor does it cover bankruptcy law in general.
The United States Trustee Program offers a variety of consumer-focused information including state by state lists of approved credit counseling agencies and debtor education providers; state domestic enforcement agencies; means testing and other information.
It is important for accounting professionals to understand the changes included in the new bankruptcy law, especially since bankruptcy lawyers are being asked to certify their efforts at verifying the debts and holdings reported by clients filing for bankruptcy. It is likely that the role of the accountant will increase as the law goes into full effect.