Look at the flurry of bankruptcy filings. Unreal! God bless the lawyers who are burning the midnight oil to get these in before Mondays deadline. I know what you're thinking- they just
want the money. In some cases, that may be true. But in others, I do believe they are very
aware at how harsh these landmark revisions will be on debtors and how pro-creditor this
legislation truly is.
And I will also say I have personally experienced a TOP NOTCH AND
GOOD, COMPASSIONATE lawyer in my lifetime. They DO exist. Once this legislation passes however, I hope a new administration comes in to change back again. It's incredibly vile. I feel for the farmers, those strapped with medical bills (you know longer can discharge medical bills in many instances), and just anyone looking for an honest, legitimate fresh start after misfortune. Pro corporation, pro creditor who throw new higher and higher interest credit card applications at lower and lower income Americans this is the single biggest black eye on this Administration in my eyes. And it is part of the "it needs to get worse before it gets better" aspect that we always talk about here in the chasm of the Great Emergence. I'm not talking about the free loaders who pile up debt irresponsibly and then discharge it like a few attorneys told us THEY did after law school, or like a few prominent business people in our community have done 2-3 times just because "everybody does it", I'm talking about your garden variety misfortunate of illness, loss of business, loss of spouse that occurs in life. These poor people will now be strapped for rest of their lives until the next beacon of Light comes in to change it and change it good. JILL
For the 4th straight week a US record was set for bankruptcy filings. Nearly 103,000 Americans filed for bankruptcy in the week that ended Friday, up from the previous weekly high of 68,287, according to figures from Lundquist Consulting Inc. of Burlingame, Calif., a financial-services advisory firm.
Typically, bankruptcy filings were about 30,000 a week.
The deluge has swamped bankruptcy lawyers across the country and forced many to turn away customers. Washington lawyer Scott Arnopol said he was handling more than twice as many cases as usual and was trying not to turn anyone away.
"This is like April 15 with tax returns. It's the only analogy I can think of," Arnopol said. "We're trying to file these cases as fast as we finish them. Normally we have a five-day turnaround for these petitions; now we're doing them in 24 hours."
The rush is intended to beat Monday's enactment of new eligibility limits for filing under Chapter 7 of the bankruptcy code, which allows those in fiscal trouble to erase their debts after forfeiting their assets.
Under the new law, only bankruptcy petitioners who earn less than the median income in their states are eligible to file under Chapter 7. Those who earn more and can repay at least $6,000 over five years can file only under a Chapter 13 debt reorganization plan, which requires some repayment.
The law would force about 10 percent of debtors to seek Chapter 13 debt relief instead of Chapter 7 protection, studies have found. As a result, creditors would net another $1 billion to $4 billion in debt repayments over five years, according to similar studies.
The law also requires filers to submit more paperwork, such as tax returns and paycheck stubs, and to get credit counseling at their own expense within six months of applying.
To a lesser extent, the law also makes it tougher to file for commercial bankruptcy by giving companies that seek debt protection less time to decide whether to assume or reject leases. They'll also have less discretion in deciding whether to propose reorganization plans and will be required to have more cash available to pay utilities and suppliers in order to keep operating.
As a result, business bankruptcy filings also have accelerated. Notable companies that filed recently include Northwest and Delta airlines and auto-parts maker Delphi.
One group that may not be able to file before the new restrictions take effect are destitute Hurricane Katrina survivors. Many are tending to more immediate concerns such as relocating, finding jobs, reconnecting with family members and recovering from injuries.
It probably will be one to three years before Katrina victims make a noticeable dent in the bankruptcy caseload, said law professor Robert Lawless of the University of Nevada, Las Vegas, who's studied bankruptcy filings after major hurricanes.
"There's always a rather significant delay from the onset of problems to the actual bankruptcy filing, so it doesn't surprise me at all that we don't immediately see" a large number of hurricane victims in bankruptcy court, he said.
For information about the new bankruptcy law online, go to the U.S. Trustee Program at www.usdoj.gov/us.
For the list of credit counselors approved by the Justice Department, go to www.usdoj.gov/ust/bapcpa/ccde/cc(underline)approved.htm.