Although consumer advocates tried to warn Congress at the time, only now is it becoming apparent that the 2005 Bankruptcy Reform Legislation (BAPCPA) was an attempt to blame falling corporate revenues on consumers. Mortgage and credit card companies blamed their lack of revenue on consumer bankruptcies while continuing to dole out unsafe and impossible loans to consumers and punishing them with foreclosures and rate increases if they couldn't keep up the payments.
Furthermore, lenders, not consumers, are the ones that seem to be abusing the system these days. According to U.S. Senate testimony, bankruptcy trustees are seeing "systemic problems" with mortgage servicers that:
Tack on exorbitant fees. Miscalculate how much is owed. Refuse to communicate with borrowers or the court. Force homeowners into foreclosure without authority to do so, usually because the servicers can't figure out or prove who actually owns a mortgage, which has typically been chopped up and sold to investors. If you missed the irony, I'll spell it out. Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 because lenders had alleged that consumers were abusing the bankruptcy system.
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