Two new academic studies confirm what NACBA has been saying for years about the 2005 bankruptcy legislation. The first study, by Michael Simkovic, investigated whether there was any truth to the creditor lobby's claim that passage of the bill would result in savings to consumers in the form of lower costs for credit. (Remember the "bankruptcy costs $400 to every household in America?") The study found that not only had credit costs not gone down but that they have gone up very substantially since the legislation went into effect. And, needless to say, profits on credit cards have also gone up greatly. A copy of the study can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1157158

The second study, by David Bernstein, an economist at the U.S. Treasury who chose to post this analysis as private citizen looked at whether the 2005 bill contributed to the current mortgage crisis. It found that by curtailing homeowners' ability to obtain relief from other debts, through increased costs and pro-creditor provisions, the legislation made it harder for homeowners to deal with their mortgage problems. The paper is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1154635.