Some Effects of the Bankruptcy Reform Act of 1978

The Bankruptcy Reform Act 1978 (US) was enacted in part to modernise bankruptcy laws and to cope with the burgeoning number of bankruptcies which had increased over the past decade. The authors in this article examine the reasons behind this increase and the effects of the Act. Their analysis reveals that the Act has had an adverse effect on those it intended to aid mainly because of its denial of credit to high risk borrowers.