BURLINGAME, Calif. — The national credit union trade associations lobbied hard for the Bankruptcy Abuse Prevention and Consumer Protection Act that they say targets debtors trying to game the system, and after nearly a decade of work got their wish at the end of 2005.
The new law became effective Oct. 17, 2005. Running up to that date, bankruptcy filings skyrocketed to a record of just over two million in 2005–up from 1.55 million filings in 2004, or 31.6%, according to Lundquist Consulting. October 2005 alone saw 650,000 filings.
But filings slowed abruptly after October, Lundquist data showed, with just one in 170 households filing bankruptcy in 2006, based on annualized third quarter data; at the same point in 2005, that figure was one in 53.
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