Ignoring the financial reality of the situation, this administration will have succeeded in dismantling a safety net for honest Americans who have financial difficulty in the name of what is believed to be a systemic problem with credit.

Since 1898, the bankruptcy code has allowed debtors to receive a fresh start. Six months after the ink is dry on the new piece of legislation, this will no longer be a possibility no matter the reason for the appearance before the court. The Chapter 7 code allowed for the debts to be relieved, leaving the creditor with no recourse but to increase rates on good debtors.

The new law would force many debtors into Chapter 13, a code that requires repayment over a period of time. The means test would apply to those earning less than the median income of the state where they live. The current national average according to Census Bureau data of 2003, the latest available, show an average income of $43,318.

Opponents of the bill cite the large number of working poor who seek protection from job loss or medical bills as the new victims. A study conducted by Harvard recently revealed a disproportionate number of bankruptcy filings were the result of medical bills. With 39.5 million residents of this country currently living in poverty, a full 12.5% of the population, this bill will eventually open the door for tighter legislation, lowering of the means test standards to include more income levels, and create a nation of impoverished debtors.

It should also be noted, one of the new focus groups for the IRS and their limited auditors are non-profit groups. Among them are the credit counselors, who, now by law, act as the intermediary between you and the creditor during the proceeding. Although they do not receive a fee for the service, this industry is receiving referral fees from the companies who manage these post court bankruptcies.