About one year ago, significant legislation was passed by the United States Congress attempting to reduce the number of fraudulant and unnecessary bankruptcy filings that had, up until that time, been clogging the court systems. Despite strong reaction by consumers and bankruptcy attorneys who did not look favorably on the new legislation, the bill includes provisions that would, among other things, lead more people to file for Chapter 13 over Chapter 7 bankruptcy, thus forcing more debt to be repaid rather than absolved. Visit http://www.bankruptcyhome.com/bankruptcy-certification.htm for more information on the changes in bankruptcy law. Now that a year has gone by, experts are still divided when it comes to whether or not the legislation will achieve its intended purpose of reducing unnecessary bankruptcy filings, or if it is only adding additional costs and frustrations to the filing process.



Looking back, it seems that many of the consumers' and attorneys' fears have come true. By attempting to make it more difficult for people to file fraudulantly, bankruptcy attorneys claim that it is only making things more difficult for those with a legitimate claim. A recent study by the Natioal Association of Consumer Bankruptcy Attorneys suggests that not only is filing for bankruptcy taking considerably more time for each case, but it seems that the new reforms are not significantly achieving their aim but instead are only increasing costs.

Another fear is that the primary beneficiaries of the new legislation would be the credit card companies who fought so hard in supporting it. It has long been assumed that as more individuals are forced to file for Chapter 13 over Chapter 7, more of the unsecured debt owed to credit card companies would have to be repaid. This is very significant to the average claimant and translates into an extraordinary boost to credit card companies' bottom line. However, this remains to be seen. It is still too early to be able to see these kind of effects and the data generated thus far is mixed at best. It is certain that credit card companies will benefit from the new legislation, but to what extent is still up in the air. Many fear that this may tip the scales for those who are unable to repay this additional debt and will prevent many who are in serious need of bankruptcy protection from filing successfully.

This all, however, rests upon one other prediction voiced a year ago. Will the new legislation actually make it more difficult for individuals to file for Chapter 7 bankruptcy? The outcome of this is also unclear. For the most dire of filings, Chapter 7 will always be an option, however, the question is how it will affect those cases that are borderline. If this prediction is validated, then more people will not get an all out "fresh start" but will be forced to repay a significant portion of their debts through Chapter 13 bankruptcy. You can find more information on the differences between Chapter 7 and Chapter 13 bankruptcy at http://www.bankruptcyhome.com/chapter13orchapter7.htm .

Only time will tell whether the new bankruptcy legislation is effectively reducing the number of fraudulant filings or whether it is simply making things more difficult for those with legitimate claims. Nevertheless, it seems that bankruptcy rates, despite the initial post-reform dip, are back on the rise.