In order to prevent bankruptcy abuse, the bill changes bankruptcy court procedures, making it easier for Chapter 7 cases to be dismissed. The reform bill also establishes a means test to determine if a consumer really needs Chapter 7 protection, or can afford to pay off all his debts instead. But opponents say the number of bankruptcies has fallen the last two years, and claim that changing bankruptcy laws as the economy slows could squeeze consumers. In other words, now that more working Americans will be forced to file for bankruptcy because of circumstances beyond their control, we should make it harder for them to do so. Particularly troubling, critics say, is that these changes would come at a time when consumers have accumulated a tremendous amount of debt.
Critics also claim that charges of bankruptcy abuse are exaggerated.
There is disagreement as to how many people who file to discharge their debts under Chapter 7 could actually pay them off under Chapter 13. A Visa-sponsored study has suggested 11 percent, while a study commissioned by the American Bankruptcy Institute estimated that it was as low as 3.6 percent. The reform bill requires people filing for bankruptcy to have taken a credit counseling course in the six months prior to the day they file. But the reform bill could allow tenants to be evicted during bankruptcy proceedings. And while current law in some cases allows a person to get debts discharged every six years, the new bill raises that to eight under certain circumstances.