Now, since 2005, it's harder to file bankruptcy and get discharged from our debts so easily.

People in the higher income brackets (more than the median) can't get Chapter 7 now (which lets us get away Scot free) but instead are sent to Chapter 13 court (where we have to pay as much as possible of each debt).

If anyone has any "disposable" (extra) income, he'll have to use it to pay creditors at least some of what's owed.

Bankruptcy lawyers must ensure the court their clients are being truthful, or else get fined themselves. Therefore, lawyer fees are much higher now because lawyers don't want the risks of representing us in bankruptcy.

Now people can't claim high living expenses that eliminate all their disposable income. The court has a formula that just sets the expenses at a certain figure, according to income, and will not listen to any arguments about how we have extra expenses making it impossible for us to pay any more to the creditors.

The end result is that people come out of bankruptcy in a much weaker financial state than before, so it's not very attractive as a way to avoid debts.

Now the courts require everyone to submit to credit and budget counseling before even entering the bankruptcy court.

Changes were made to the Bankruptcy Code in 2005 when Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Right there we have a clue that Congress thought consumers were abusing the ability to file bankruptcy and so they wanted to place new restrictions around the process.

The biggest change was that a new form was created called the Means Test. Debtors must show that their annual income falls below the median income level for their state in order to file a Chapter 7. If their income is too high, they must file a Chapter 13 which is a repayment plan. The thought was that if debtors have a decent income and money coming in, they should make a good faith effort to try to pay their creditors back and not abuse the Bankruptcy Code.

Another change was that all debtors must now take a mandatory court approved credit counseling course before they can file bankruptcy. They must also take a mandatory post-filing debtor education course or they cannot receive the discharge of their debts. It has seemed to me that this is just another hoop to jump through for people who want to file bankruptcy and I don't really think they are learning anything that beneficial. They usually have to pay to take those courses too.

I've worked in bankruptcy for 10 years so I have seen 5 years before the change and 5 years after. For the most part the change in the law only created more paperwork and higher fees for the attorneys. It did not change the spending habits of consumers and it did not really stop people from being able to file Chapter 7 either.

The Bankruptcy Code was not being abused. If Congress wanted to help they should have put more restrictions around some of the practices of credit card companies.