In a few weeks, one of the most sweeping changes in the federal bankruptcy law goes into effect.

That might have sent people surging in droves to the federal courthouses to file before the new rules go into effect Oct. 17, but attorneys in the Central Savannah River Area are far from panicked.

It doesn't mean those who represent debtors think much of the new law, however.

The credit card companies and banks "sold Congress a bill of goods," Augusta attorney Zane Leiden said.

Convinced that too many deadbeats escape financial responsibility and that creditors are being cheated in increasing numbers, Congress passed legislation that President Bush signed into law April 20: the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

The new law's major provisions require those filing for bankruptcy to get credit counseling and provide proof of income by tax returns, and it tightens restrictions on who can file for Chapter 7 bankruptcy.

Chapter 7 allows a person to use disposable assets to pay off what debts he can and discharges the rest. It has been the bane of credit card companies and other unsecured creditors because they are at the end of the list of creditors and rarely see any payback.

According to those testifying before Congress on behalf of the new law, credit card companies saw $40 billion in losses because of personal bankruptcies last year.

Because of what he sees locally, Mr. Leiden doesn't predict many more people here will be forced to file Chapter 13 - in which a person's debts are prioritized so that at least a portion of most debts are paid off.

Not only do most people locally already file under Chapter 13, but most people seeking to file for bankruptcy also earn much less than the new cutoff point for filing Chapter 7, Mr. Leiden said.

A 1999 study by federal bankruptcy court judges found that the average income of those filing for bankruptcy was $22,000 a year, and the biggest cause was job loss.

The new cutoff will be in the range of twice that amount - the median income in Georgia for a family of two. Those who make less than this can still file Chapter 7 if they choose.

Attorneys Clay Ward and Angela Seymour say the top reasons for bankruptcy they see in their clients are job loss, medical bills, divorce or a combination of these.

There are some people who simply cannot manage their finances, but the new law seems to go overboard in reigning those people in, Mr. Ward said. While most lawyers are still studying the law, it appears that the new law will cost people more money to file, Mr. Ward said.

If the credit card companies and other unsecured creditors want more protection, they should take a proactive approach, Mr. Ward said.

He has had clients whose only source of income is Social Security, but they constantly receive unsolicited pre-approved credit card applications.

"Why not do a background check to see this person only has $600 a month income?" he said.

But unsecured creditors have less to fear about Chapter 7 bankruptcies in Georgia and South Carolina than in other states.

The percentage of all types of bankruptcy petitions that are Chapter 7 in Georgia and South Carolina are two of the lowest in the country, according to statistics collected by the American Bankruptcy Institute.

Unsecured creditors in Chapter 13 bankruptcies also are at the end of the payback line. But creditors have always had the ability to object to proposed settlements, Mr. Leiden said.

There already are limits on bankruptcy relief for those living recklessly beyond their means, he said.

The credit card industry's biggest objection was that the system has been too subjective because settlement terms have been up to the individual judges, Mr. Leiden said.

The image of the big spender charging furs and leasing a Porsche a week before filing for bankruptcy and getting free of those debts might exist somewhere, maybe California, but he hasn't seen any, Mr. Leiden said.

The majority of people filing for bankruptcy are single parents, Mr. Leiden said.

A growing segment bankruptcy lawyers are seeing now are those with "grandparent guilt syndrome." Older Americans who shun debt themselves are going into debt to help their children and grandchildren, Mr. Leiden said. Since the grandparents lived frugally, they have good credit but they also have fixed incomes that don't enable them to make additional payments, he said.

Mr. Leiden and other attorneys perceive an increase in bankruptcy clients in the past few months, but Mr. Leiden said it probably is a result of the attention about the upcoming changes in the law - it has made people more aware that bankruptcy is an option.

"People come to us as a last resort," Mr. Leiden said.

Reach Sandy Hodson at (706) 823-3226 or sandy.hodson@augustachronicle.com.