MANY PEOPLE NOT FILING BANKRUPTCY BECAUSE OF MISCONCEPTIONS

November 3, 2006

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A year after the new bankruptcy law went into effect, it remains unclear how many abusive bankruptcies the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) has actually prevented, but the new law has achieved a short-term objective of reducing filings, MSNBC.com reported yesterday.

While bankruptcy filings for the twelve months since BAPCPA’s enactment are dramatically lower, the American Bankers Association expects bankruptcies will eventually return to levels prior to the implementation of the new bankruptcy sometime during 2007. “A big misperception was and continues to be that the new law abolished bankruptcy,” said ABI Resident Scholar David Skeel. However, increased costs and requirements may be steering some consumers in need away from bankruptcy.

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Many People Not Filing Bankruptcy Because of Misconceptions