They get no discharge and their case gets dismissed. They just get a bankruptcy filing on their credit report and any payments they had made to the trustee towards the Chapter 13 plan, and the filing fee and the attorney's fees, and now under the new law the credit counseling fees and money management class fees, are gone. They would all have to be paid from scratch all over again if the debtor wanted to try again assuming the second filing was challenged as an abusive serial filing. I think under the new law the 70% failure rate will climb and I think that is in part by design by the drafters.
As a lawyer who works with this stuff I will end up making more money off of the new bill. But I still think its bad for the efficient operation of our economy to have now 80%-90% of these failed Ch 13 debtors to be locked in a permanent indebtedness cycle. These people are not going to be able to function in the economy and that is not good for the rest of us. Its in the rest of our self interest to not have these people permanently trapped and not operating at an optimum level.
Many third world countries have no problem with permanent indebtedness and debt slavery (yourself or you can substitute a relative such as a child), but I submit that that practice is ineffecient for their macroeconomy (I'll let others worry about the morality) and one of the reasons they are still a third world country.
"Its in the rest of our self interest to not have these people permanently trapped and not operating at an optimum level."
I agree with your reasoning and the above conclusion, however, I think that the same reasons that you articulated will have a profound effect on those who would incur debt with no intention of payback - I submit that at some point (some nearer to the end than others) a large proportion of pre-filing behaviour becomes just that kind of fraud....
Society benefits from me having a license to drive, however, if I refuse to drive sober, society has no choice but to revoke my license. (a hypothetical, mind you!)
I also submit that you have a very good point....why make laws that will not be followed, especially if society has no intention of forcing compliance in some manner?
Again, I have to say that you have submitted the only reasonable argument against this change in the law, and I've read a ton of them over the past few months.