that's part of the PROBLEM, not the solution
Probably true, but his #4 is a very good point.
Actually, if slightly rephrased, it could be part of the solution.
In particular, right now people who are deemed to be poor credit risks are often assigned extremely high interest rates based in part on the fact that the larger a person's balance when they declare bankruptcy, the greater a fraction of their assets the creditor will get. If someone carries dept for four years at 18% and the creditor ends up getting 50 cents on the dollar, the creditor will almost break even. Had the debt been at 5% interest, however, the creditor would stand to lose a lot of money.
So if the effect were to reduce the interest rates that were charged by sub-prime lenders, that could make it easier for people to work their way out of debt.
Fundamentally, the goal in a fair and just bankruptcy system should be to make it so that bankruptcy is bad enough that nobody will willingly let their debt spiral out of control if they can avoid it, but not so severe that people's life is forever ruined. Very tough balancing act.