The 2005 bankruptcy law change included stricter eligibility requirements, according to FindLaw. The law, called The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, was a major reform of the bankruptcy system. A new means test went into place for filing Chapter 7 bankruptcy, and filers are mandated to show proof of income when filing for Chapter 7 or Chapter 13.
Regarding the means test change for Chapter 7 filers, if a person's current monthly income is above his state median income and he can afford $100 per month toward paying off his debt, he must file for Chapter 13 bankruptcy instead, explains FindLaw. There is a formula to determine if the filer can afford the extra $100 per month, and the formula includes the filer's monthly income, his monthly expenses and the total amount of his debt.
As far as the proof of income requirement, filers who wish to file under Chapter 7 or Chapter 13 must show proof of income by providing copies of their federal income tax returns from the previous year, states FindLaw. If a filer has not paid his previous year's taxes, he must do so before he can proceed to file for bankruptcy.