1 YEAR AFTER “REFORM” DEBATE ABOUT ITS EFFECTS

October 18, 2006

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One year after the new bankruptcy law took effect, there’s still debate about the fairness of the new law and whether it’s working to reduce bankruptcy filings as intended, the Dallas Morning News reported today. “The feeling is that so far, it’s a success,” said Laura Fisher, spokeswoman for the American Bankers Association. “Some of the abuse has been wrung out of the system.” However, Ike Shulman, former president of the National Association of Consumer Bankruptcy Attorneys, said: “Compared with what the credit industry claimed they could accomplish, it’s pretty much been a bust.” The means-testing measure that was built into the new law is having little effect, bankruptcy attorneys and credit experts said. “Abusers were always a very small part of that population,” said ABI executive director Samuel J. Gerdano. Credit counselors say they’re not seeing much success in the new credit counseling requirements of the new law- a consistent trend nationwide, said Susan C. Keating, chief executive of the National Foundation for Credit Counseling. “We believe these people are in serious financial trouble. We don’t believe these are people who are trying to game the system.”

1 Year After “Reform” Debate About Its Effects