The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect in October of that year. As its name clearly implies, it was designed to make bankruptcy less attractive to filers and curb perceived abuses of the bankruptcy system.

The fight about this law was waged by financial institutions on the one hand and consumer rights advocates on the other. Lenders felt that the bankruptcy courts were being abused and that borrowers who had the means to repay were allowed to walk away from their obligations.

This, in turn, raised the cost of credit for the rest of us, since the losses were spread among those still solvent.

Consumer advocates argued that the majority of filers were in that position because of unexpected bills