COMMENTARY: BANKRUPTCY LAW CHANGES BEING FELT

April 24, 2006

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Six months after a tougher consumer bankruptcy law went into effect, a picture is now beginning to emerge of the debtors who have undergone required credit counseling and education before they file for bankruptcy to show that they are legitimate candidates for bankruptcy, according to a commentary in the Dallas Morning News today. Those who sought help from Consumer Credit Counseling Service of Greater Dallas had an average gross income of $34,200 and an average $13,400 in unsecured debt and five credit cards. The lending industry, which is pleased with the new law, said change was sorely needed to stem the rise in bankruptcies – particularly abusive filings.

But consumer advocates and bankruptcy attorneys said no one who files for bankruptcy is happy about it, and most have been driven to it by a job loss, divorce or health problems. Nationally, debtors who received pre-filing counseling had average debts of $40,673 and an average income of just $31,255, according to a survey by the National Foundation for Credit Counseling,Consumers filed for bankruptcy in record numbers last year, resulting in one personal bankruptcy for every 60 households, according to the American Bankruptcy Institute.”The latest report underscores the level of financial stress for U.S. families,” said Samuel J. Gerdano, executive director of the institute.

Commentary: Bankruptcy Law Changes Being Felt