BANKRUPTCY FILINGS FALL BECAUSE OF NEW LAW

August 29, 2006

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The Administrative Office of the U.S. Courts reported that nearly 1.48 million personal and business bankruptcies were filed in the year ending June 30, a 9.3 percent drop from the previous year, according to Bloomberg News yesterday. Individual filings fell to 1.45 million from 1.6 million and business filings fell by 2.6 percent to 31,562.

Bankruptcy filings will likely be even lower for calendar year 2006. Reasons? Not because people aren’t in heavy debt. Many people filed prior to October 17, 2005, when the new bankruptcy law went into effect. Also, many people wrongly believe that bankruptcy is no longer available to them; it is. The new law itself, is not that much different for most filers; there is more paperwork, higher filing fees, and higher attorney fees. And there is or at least was a great deal of uncertainty about how the new law would be interpreted and enforced.

The long and short of it: if you need bankruptcy relief, it is there for you. So long as you are in good faith, your need bankruptcy relief and your overall circustances warrant it, and you have a good lawyer, bankruptcy is available to you.