I filed for bankruptcy about a decade and a half ago, and I'm not really sure about the arguments surrounding this bill. Even back then, it was not easy by any means to file for a personal bankruptcy, especially not a Chapter 7 (I was forced to file a Chapter 13 even back then). From everything I've been reading about this bill, including MaryScott's diary, it appears more to reinforce what has already existed in most states than to actually be changing anything. The only thing that appeared to be intended to change the rules much was the amendments to help or exempt people in certain groups, most of whom I don't believe were exempted previous to this bill anyway.
My debt was in no way my fault, and I tried everything in my power to pay it off. When I did file, due to the existing laws, I was not permitted to file a Chapter 7 and had to file a Chapter 13 (which does not eliminate the entire debt but requires you to pay part of the debts off), but that still was extremely helpful and allowed me to turn my life back around.
My ex-husband amassed a huge amount of debt while we were married. He was perpetually starting his own business over the course of our decade-long marriage, and much of the debt was from that. Even before that, he was a student at the expensive University of Pennsylvania for a semester, and never turned in his term papers. When he wound up with all incompletes, this caused his grant to be reversed, and they demanded that he pay back the money, which was about $6,000. So we had a lot of debt, but we were managing the payments.
Then he had an affair behind my back, got the other woman pregnant, and left me for her. The courts in that state, because of no-fault marriage, divide both assets and debts equally. I was now stuck with half of his debt, but I also had to pay the full rent and utilities since I was living alone, not to mention my student loan.
I was sucked into an ever-deepening vortex. As I was self-employed, I had to pay my income tax quarterly, but the creditors kept calling and scaring me into paying them with that money. I worked six-day weeks with long workdays and bought absolutely no extras and spent nothing on amusement or pleasures. I got all my clothing from a church that gave out free clothes. Nevertheless, after two years, I was in even deeper debt than when he'd left me, thanks to the credit card companies raising my interest rate and tacking on extra fees because I was late a few times.
Even though I wanted to pay off all obligations and not besmirch my record, I had finally realized the futility of it. So I went to CCCS, one of those nonprofit places that's supposed to be able to arrange lower payments with your creditors and save the day. I was shocked when, after looking over all my debts, living expenses, and income, the person there said they couldn't help me. He said I was making too little money and my debts were too great. But he also advised against bankruptcy, which he said was very difficult and ruined your credit for the next seven years. He said to just keep doing what I was doing. Well, I tried that for another six months or so, and that's when the IRS finally cracked down. I hadn't been paying them because the squeaky wheels were getting the grease.
Still wanting to avoid bankruptcy, I tried what magazine articles always tell you you can do, but in reality you can't: calling the credit card companies and telling them you can't make the minimum payments but you'll pay them $25 a month. They laughed me off. All of them. They said that each month I didn't make the minimum payment, I'd be billed an extra $25 in fees and they'd raise my interest again. I told them that I really did want to pay them, and that this was my last attempt to try to do so, but if they wouldn't work something out with me I'd have no recourse but to file bankruptcy. They laughed again, apparently thinking they were calling my bluff.
So with heavy heart, I trudged to a bankruptcy lawyer, thinking I'd finally have that huge burden off my shoulders. He informed me that I was ineligible for a Chapter 7 (which wipes out all your debts) and could only file for a Chapter 13, which meant I would still have to pay back something to the creditors each month. So that's what I did. The laws were that student loans and the IRS absolutely had to be paid and couldn't be wiped out by a bankruptcy. The credit card companies each got a small amount, which really was negligible--maybe $500 or $700 each.
So for the next five years, I had to pay the court trustees $110 a month. The student loan was deferred for the five-year period. Even though I had to pay part of the money, this was way less than I'd been paying and, through pinching pennies during this period, it enabled me to get back on top.
But I felt like a pariah for the seven years after the discharge that it takes before a bankruptcy is removed from your credit record. No one would extend me credit, not for a car or a house. My dad and my brother both offered to cosign, but the auto loan and mortgage companies said they would not make any kind of loan if it had my name on it. It was humiliating.
Finally it was removed from my record, and my credit score is now extremely high, because I personally have always been good about paying my debts. But I can see how fragile financial health can be, because the past couple years I've had several setbacks in a row that caused me to accumulate debt. First surgery due to endometriosis with some of the bills unpaid by my insurance, then some major dental work requiring several $800 crowns, then my old dog having kidney failure and racking up a huge bill at the emergency vet in the middle of the night, and finally Hurricane Ivan damaging my house and the insurance company having a $2,000 deductible on hurricane damage in Florida. But this time I've got equity in a house and am able to use that to pay off the debt. And if I hadn't filed the Chapter 13, that wouldn't have been possible today.
So yes, this story shows the importance of being able to file personal bankruptcy, but from everything I've read, I don't see how the bill that was just passed actually makes it any harder. It doesn't look different from what it was like back when I filed. And it never was easy.