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Elizabeth Warren & Robert M. Lawless, Shrinking the Safety Net: The 2005 Changes in U.S. Bankruptcy Law (Univ. Ill. L. & Econ., Research Paper No. LE06-031, 2006).

Abstract: As part of an international symposium on consumer bankruptcy, we address some of the 2005 changes in the U.S. bankruptcy law. We outline briefly the political climate that led to the 2005 changes, and then we examine the four changes that are likely to have the greatest effect on families in financial trouble. We single out the new consumer credit counseling requirements as providing virtually no help to debtors, serving instead as one more costly hurdle a debtor must jump before filing bankruptcy. Means testing for chapter 7 eligibility has created confusion and perverse incentives for debtors. New burdens and restrictions on attorneys have increased the cost of legal representation. Finally, although not as widely publicized as other changes, new rules requiring audits of bankruptcy filings could significantly change how bankruptcy filers assert legal positions in their petitions and schedules. After considering these changes, we describe the plans of the 2007 Consumer Bankruptcy Project to go into the field to collect data on more than 2,000 bankruptcy filers.