By, Meredith Anderson

With so many people being affected by the harsh economy the amount of Chapter 7 bankruptcy is still on the rise. Chapter 7 is often referred to as a “fresh start.” Essentially after filing for Chapter 7 you are cleared of all your debts.
On October 17, 2005 a new law, Bankruptcy Abuse and Consumer Protection Act also known as BACPA, came into effect that made it harder for people to prove that they are actually in need of being cleared of all their debts. The general idea was to shift the amount of people who filed for Chapter 7 to file to Chapter 13 which is more like Chapter 11. Chapter 13 does not clear you of your debt rather is a repayment plan. The new laws help prove that people are cable of paying portions of their debt back and should not be given a free ride. The new laws also placed requirements on lawyers making it harder and more expensive to hire a lawyer for bankruptcy cases. Some lawyers have even raised their prices by as much as 100%.
The new laws have not seemed to be effective for two main reasons. First there was too much emotion that went into making the law. People don’t generally file for bankruptcy because they are bored rather because they actually have no means to pay off debt. Secondly although the law has changed the economy has as well. People now more than ever are struggling with finical debt.

Sources:

http://money.cnn.com/2005/10/17/pf/debt/bankruptcy_law/index.htm

http://www.nolo.com/legal-encyclopedia/article-30040.html

http://law.suite101.com/article.cfm/filing_chapter_13_bankruptcy