“Did Bankruptcy Reform Fail” is the title of a study to be published in an upcoming issue of the American Bankruptcy Law Journal, according to the Consumer Bankruptcy News. The study, conducted by the Consumer Bankruptcy Project, compared cases filed in 2007 under BAPCPA, with cases filed prior to the passage of BAPCPA.
According to the Consumer Bankruptcy News, the findings are that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 neither prevented abuse nor protected consumers. BAPCPA’s most notorious innovation, the Means Test, has not had the intended result of forcing above-median debtors into Chapter 13. Instead, the study says, those who could afford to pay their bills are actually filing for bankruptcy more than before.
The study found that in 1981, bankruptcy filers owed debts equaling about 17 months of their income. In 2001 that amount increased to more than 30 months of income, and by 2007, for those who filed bankruptcy, 39 months of income would be required to pay back creditors.
In January, a new President and Congress have an opportunity to correct the mistakes made in BAPCPA.
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