After a divorce led him to file for bankruptcy in December, Edward Bucking found out just how extensively a new law had changed the system. Instead of the "1-2-3 cut-and-dried" application he had heard about, Bucking had to file reams of paperwork, take classes and pay higher fees.
Ten months later, the 37-year-old Plainview, N.Y., electrician is waiting for his debts to be discharged.
"It's pretty stressful because you are not sure what's going on," Bucking said. "They keep you hanging. It's like a waiting game."
Stories such as Bucking's are all too familiar to consumer advocates. A year after the new bankruptcy law took effect, it has become much more difficult to seek protection.
The number of filings plummeted at first but is starting to creep up again as people in dire financial straits try to navigate the new system.
"The only thing Congress succeeded in doing when it adopted the 2005 bankruptcy amendments was to erect new hurdles in the paths of people who legitimately and often desperately need the system," said Henry Sommer, president of the National Association of Consumer Bankruptcy Attorneys.
Proponents of the new law say it is accomplishing its goals of reserving bankruptcy for those truly in financial trouble and weeding out abusive filers seeking to escape their debts.
The aim was to make sure that debtors with the means to make good on their loans do so under a Chapter 13 repayment plan. The law instituted a means test for those looking to liquidate most of their debts under Chapter 7.
Bankruptcy filings fell to a 20-year low in the first half of this year. Fewer than 273,000 filers nationwide sought relief, down from 868,500 a year earlier. This is in part because debtors rushed to file before the new law took effect.
The crowds at the courthouse are likely to grow in coming months. Some people with adjustable-rate mortgages are finding that they can no longer make the monthly payments.
"All of the same reasons to file for bankruptcy before the enactment of the new law still exist," said Stuart Gelberg, a bankruptcy attorney in Garden City, N.Y. "Consumer debt didn't go down. I'm getting calls from mortgage brokers about people not able to refinance, suggesting they explore bankruptcy."
Those who file must submit six months of pay stubs, two years of tax returns, six months of bank and brokerage accounts, and any deeds and car titles, said Michael O'Connor, a consumer bankruptcy attorney in Albany, N.Y. They must also take a credit-counseling course before they file and go through a financial education program.
The cost of declaring bankruptcy has risen about 50 percent, lawyers said. Filing fees have gone up to $300, and the mandatory courses add about $100. Lawyers have raised their fees because of the increased paperwork. Gelberg charges a minimum of $1,000, up from $750.
Tami Luhby writes for Newsday on Long Island.