First published on Monday, February 27th, 2006 at 12:54 pm
Last October, a new federal bankruptcy bill went into law that makes
it harder for people to declare bankruptcy. The premise of the bill,
known as the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” is that consumers were spending irresponsibly and then walking away from their debts.

It turns out that the premise was flawed. In the first analysis of
filings since the bill came into effect, it was found that 97% of all
filers truly could not pay their debts. In fact, only 1 in 20 were
candidates for a debt management plan. In addition,

Only about one in five (21 percent) of those seen by a
credit-counseling firm were identified as racking up debt due to
‘’circumstances within their control.

That may seem high, but don’t forget that’s only 21% of those who were candidates for the debt management plan.

For more information, read Surprise! Bankruptcy filers really are broke - The Boston Globe