In 2005, the Bankruptcy Code was significantly amended by The Bankruptcy Abuse Prevention and Consumer Protection Act. Consumer lenders advocated the act and drew harsh criticism from consumer advocates, bankruptcy judges, bankruptcy lawyers, and bankruptcy academies. The ratification of the act only occurred after 8 years of intense debate in Congress. When signing the bill, President Bush stated:

Under the new law, Americans who have the ability to pay will be required to pay back at least a portion of their debts. Those who fall behind their state's median income will not be required to pay back their debts. The new law will also make it more difficult for serial filers to abuse the most generous bankruptcy protections. Debtors seeking to erase all debts will now have to wait eight years from their last bankruptcy before they can file again. The law will also allow us to clamp down on bankruptcy mills that make their money by advising abusers on how to game the system.

The bill enacted a “means test” which was implemented to make it more difficult for an individual to file under the protection of Chapter 7. However, the “means test” does increase the likelihood of discharging debts for an individual who qualifies for Chapter 7. The new law also requires those seeking bankruptcy relief to participate in credit counseling with approved agencies before being permitted to file a petition of bankruptcy. However, critics argue the counseling comes at a point too late to provide significant help.