BANKRUPTCY FILINGS DELUGE COURTS BEFORE DEADLINE
October 13, 2005
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Bankruptcy lawyers nationwide report record numbers of bankruptcies, particularly Chapter 7 bankruptcies, being filed nationwide, before the new “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005″ takes effect at midnight Sunday.
In April, President Bush signed the new bankruptcy law, the biggest overhaul of the bankruptcy code in a quarter century. The law, among other things, will make it harder for some people to file a Chapter 7 bankruptcy, which erases debts entirely.
The new law imposes a test to determine a person’s ability to repay debts. Those with income above the state’s median household income who can pay at least $6,000 over five years, or $100 a month, would be forced into Chapter 13. In that case, a judge could order a repayment plan of credit-card charges, medical bills and other obligations.
Under the current law, a bankruptcy judge determines under which chapter of the bankruptcy code a person falls, although most people seeking to file for Chapter 7 usually can do so.
My office has stopped taking cases under the old law. We will be interviewing clients starting October 17 for possible bankruptcy filing under the new law.
Bankruptcy Filings Deluge Courts Before Deadline
