Bankruptcy no longer an option?

From the Philly Inquirer:

Filings for bankruptcy decline 70 percent

Bankruptcy filings plunged 70 percent last year after changes to federal rules made it more expensive and burdensome to file for protection from creditors.
The Administrative Office of the United States Courts reported yesterday that federal bankruptcy cases fell to 617,600 last year from 2.1 million in 2005, when debtors rushed to file under the old rules.

Last year’s filings were even 62 percent below the nationwide average for 2002 through 2004.

Experts said it was not completely clear why bankruptcy filings had dropped off so sharply.

“We know there is a perception out there that you can’t file bankruptcy anymore,” said Henry J. Sommer, a Philadelphia lawyer and bankruptcy expert who is president of the National Association of Consumer Bankruptcy Attorneys.

Sommer said 90 percent of the people who could file for protection from creditors under Chapter Seven of the bankruptcy code before the law changed could still do so.

Among the changes is a “needs test” of a borrower’s ability to repay at least some debt.

Chapter Seven, the most common form of bankruptcy, provides a financial fresh start, allowing borrowers to walk away from their debts.
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In the Eastern District of Pennsylvania, total filings fell to 8,325 from 29,207. Filings in New Jersey, which has one federal court district for the entire state, dropped to 14,041 from 49,597. In Delaware, which also has one district, filings were down to 1,528 from 4,368.