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The Congressional Research Service Says No Real Effect from BAPCPA

posted by Bob Lawless

According to a story in this morning's BNA Bankruptcy Law Reporter, the Congressional Research Service (CRS) released a study stating the 2005 amendments to the bankruptcy law (the Bankruptcy Abuse Prevention and Consumer Protection Act or BAPCPA) will not permanently reduce the U.S. bankruptcy filing rate. Those findings fit with what we have been seeing the past few months. Even on a per capita basis, the March 2010 bankruptcy filing rate matched the rate from before the 2005 amendments.

CRS reports are not publicly released as a matter of course, and the Bankruptcy Law Reporter is a subscription service. Hence, I can't link you anywhere for this information. If someone does have a copy of the CRS report, I will be happy to make it available here through Credit Slips and/or pass it along to Open CRS.


No permanent reduction but the damage was done on the front end.

Can I harp on all the crap we have been getting from the UST lately on 7s...??

Went to a UST training on the means test and they touted all the money they uncovered..something like one billion...BS! But they did talk about these individual audits that have been going on. To hear a rep speak of the bankruptcy reform you would think it was the best thing since civil rights. So tax payers pay extra so that the government can contract out random audits. Isn't that the 7 and UST's job? They gave some figure like 12,500 audits at an average of 56 hours spent per audit. @ $200 bucks per hour (my estimate) that would be $140 million to contract out random audits...?

My personal opinion is that reform was not initiated to determine an individuals "means" but was written for the express intent of intimidation.(I guess because totality of circumstances was too much of a burden) Intimidating the debtors to keep them from filing and intimidating attorneys from even filing bankruptcies or being in the BK biz at all. rant rant rant.. Evidence pointing out that this is the case comes from the UST website when it instructs (debtors) what filing for bankruptcy means. It is slanted to push debtors completely away from 7 all together.


"Chapter 7- A trustee is appointed to take over your property. Any property of value will sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the State where you live and applicable federal laws".

"if you have already filed bankruptcy under chapter 7, you may be able to change your case to another chapter". THEY DO NOT MENTION WHATSOEVER that they could change their chapter 13 to a 7 if they qualify...

At the meeting they did admit that in our SD of Texas the 5th Cir. decided that we could include certain expenses in the means test of which the UST as a whole does not approve of. SO they told us that even though we could claim it, they would audit that same expense under what they called a 707b analysis. So in other words even though its law in the 5th cir. don't do it or its going to be more work for you!

To add insult to injury one of the local auditors seemed scoff at the notion (proposed by a local bk attorney) that our middle class is shrinking. Probably Republican...Hey, its Texas the odds are good that he is.

By the way looking at the audited Chapter 7 trustee reports and certain segments comparing 2004 to 2008 I found the following comparing increases from 2004 to 2008:

Gross receipts= +54%.
Trustee fees=+47%.
Other firms legal fees=+76%.
Trustee accounting fees=+300%.
Outside professional fees=+45%
Total disbursements=+58%

I wonder if the BAPCPA contributed to the increases and it would seem there is indeed a need to have oversite audits when $2.3 billion dollars is at stake.

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