The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act limited homestead exemptions and imposed means test to discourage petitioners seeking financial benefits. We find that these restrictions were effective in steering petitioners away from Chapter 7 filings and into Chapter 13.

When there are more moment conditions than observations, the usual GMM weighting matrix is singular. We show that using the generalized inverse is not a good idea. With continuous updating, the criterion function equals one for every parameter value.