Louise Witt:

Mr. Girard’s experience is apparently much more common than the policy makers in Washington might think. A study commissioned by the Ewing Marion Kauffman Foundation in Kansas City, Mo., which supports entrepreneurial education, found that almost one in five Americans who filed for personal bankruptcy protection in recent years had operated businesses – small companies, home enterprises or start-ups – within two years of filing for bankruptcy.
Many of them had incorrectly filled out their paperwork, so the government mistakenly counted them as individuals, not businesses. In many more instances, the study showed, they had been classified as individuals by a computer software oversight.
The study’s findings raise the possibility that the bankruptcy law President Bush signed in April, and which is to take effect in October, may have damaging ramifications for the nation’s entrepreneurial culture.
Instead of cracking down almost entirely on careless consumers who cannot pay credit card bills, the study indicates, the legislation threatens to hobble untold numbers of entrepreneurs and small-business owners caught in financial setbacks.

Wisconsin Senators Kohl & Feingold supported the bankruptcy reform law. The Kauffman report can be downloaded here.