What loophole regarding consumer debts was closed by the bankruptcy reforms passed in 2005?

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The bankruptcy reforms passed in 2005 reduced full exemptions for homes to partial exemptions or additional requirements for residency, closing a loophole regarding consumer debts. Consumers could no longer fully exempt their homes from bankruptcy proceedings, which had previously allowed them to keep their homes even if they couldn't pay for them. By reducing exemptions or imposing additional requirements, the reforms aimed to prevent abuse of the bankruptcy system and ensure that consumers only used it as a last resort.

What Loophole Regarding Consumer Debts Was Closed by the Bankruptcy