Bankruptcy filings before and after implementation of the bankruptcy reform law

After the effective date of the Bankruptcy Reform Act (1979), bankruptcy filings rose sharply in most states. The increase can be ascribed partially to the fact that unemployment rose and working hours declined from 1978 to 1980. In addition, state laws on garnishment had a greater effect on bankruptcy filings in 1980 than in 1978. Nonetheless, a significant increase in filing rates from 1978 to 1980 could not be accounted for by changes in state laws or employment conditions. The evidence is consistent with the hypothesis that the Act, per se, contributed to the increase in bankruptcy filings.