Effects of the BAPCPA on the chapter composition of consumer bankruptcies

- We examine the impact of the BAPCPA's homestead exemption restrictions and means test.
- State-level panel data from 2000 to 2007 is used.
- We form a treatment group from states that have greater exposure to these provisions.
- Homestead exemption restrictions increased the Chapter 13 share by 3.6 percentage points in treated states.
- Means test increased the Chapter 13 share by 3 percentage points in treated states.

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act limited homestead exemptions and imposed means test to discourage petitioners seeking financial benefits. We find that these restrictions were effective in steering petitioners away from Chapter 7 filings and into Chapter 13.