Micheline Zagurski and Linda Lips wanted a clean slate when they decided to join the hundreds of Nebraskans and Iowans who filed for bankruptcy this month.

Zagurski hasn't worked since she shattered her right leg after falling down the basement steps of her Omaha home. Lips got divorced, leaving her with a mortgage she couldn't afford at the same time she was unemployed.

Both said their financial difficulties began two years ago, but new rules that take effect Oct. 17 have hastened their decisions to file for bankruptcy protection.

The new regulations will disqualify thousands of Americans who could have their debts erased under the current law's more generous provisions. The October deadline has caused a spike in filings nationwide.

Since the law passed in April, Nebraska personal bankruptcy filings are up 19 percent from last year's record pace. Filings in Iowa's bankruptcy courts were 21 percent ahead of last year for the period from April through July.

"We're starting to level out" from the summer surge in filings, said Diane Zech, clerk of the U.S. Bankruptcy Court in Omaha. "But that might change when we get closer to Oct. 17."

Lips said she filed this month because "it would have been impossible" for her under the new provisions to eliminate $257,000 in debts from her former marriage.

Changes to the bankruptcy code will subject debtors seeking Chapter 7 bankruptcy protection to a means test. The test will apply to people who earn more than the state's median income and can afford to pay down their debt by at least $100 per month over five years.

Nebraska's median household income in 2003 was $41,406, according to the U.S. Census Bureau. Iowa's was $40,526.

Under old Chapter 7 provisions, debtors could forfeit certain assets and erase their debts. Under the new law, some debtors who formerly qualified for such protection would be steered into more stringent Chapter 13 bankruptcy, which sets up a repayment schedule.

Lips wanted to start over after her divorce and move to Lincoln from Pittsburgh, but the problems in Pittsburgh that she thought were behind her followed.

Pennsylvania law allows a couple to divorce without a property settlement. After their divorce, Lips said neither she nor her exhusband made payments on their car or home, which they still owned jointly.

Her ex-husband already has completed bankruptcy proceedings, Lips said, making her the sole holder of the titles and the debts attached to the house and car.

Compounding the problem was credit card debt Lips said she ran up after being laid off in 1996. She said she had been paying her cards down since then, but with a minimum payment of $150 on one card that didn't even cover the interest, she wasn't making headway.

"Since 1998, I hadn't used them. I just kept trying to pay them down."

Studies show a correlation between rising consumer debt and the number of bankruptcies filed. Total revolving credit -- which includes credit card debt -- rose to $796 billion in 2004, more than double the $358 billion in 1994.

With many people servicing large loans, major life changes can push them into insolvency.

Last year, 1.6 million Americans filed for personal bankruptcy, more than twice as many as 10 years ago. Between 1994 and 2004, Nebraska filings rose 160 percent to about 9,000 last year. Iowa filings over the same span rose 139 percent to about 13,000 last year.

Illness, job loss and divorce were the immediate cause of 90 percent of bankruptcies, according to Harvard studies.

For Zagurski, the trigger came when she fell and broke her right arm and leg.

She has had four surgeries on her femur, which hasn't healed properly. With metal rods holding together the bones in her right arm and leg, Zagurski said she will be confined to a wheelchair and unable to work for at least two more years.

She lives on monthly checks from disability insurance and Social Security. Under her bankruptcy filing, she will continue to make payments on her house, car and student loans but will eliminate the $30,000 in credit card debt she said she has struggled to pay for a decade.

Without the kind of income she had while teaching computer courses, Zagurski said, she missed a payment on one credit card, which caused all her creditors to hike interest rates.

"If you're late on anything . . . it just adds up so much. I just couldn't keep up."

Not being able to work is frustrating, she said. She said she wrestled with the decision to file for bankruptcy but realized she needed to file so that she could recover financially as well as physically.

"I should've filed 10 years ago," she said. "I waited because I felt I owed those bills, but I can't do it. I'm sick."

Rules changing

What the law will do: Changes to bankruptcy rules take effect Oct. 17 and make it harder to erase debts in bankruptcy. Debtors making more than the state median income ($41,406 in Nebraska, $40,526 in Iowa) will be subject to a means test. The means test will require debtors capable of paying $100 per month over five years to go through a more stringent bankruptcy proceeding.