Could Prior Debtors File 7 Today?

I saw an interesting comment about the effect of the new bankruptcy law on Link: TPMCafe || The Bankruptcy Wars Continue. Apparently a study done by the Denver bankruptcy clerks office found that 80% of chapter 7 debtors who rushed to file just before the new bankruptcy law took effect would qualify for Chapter 7 under the new law. The primary difference between the old and new bankruptcy law for most debtors, the author says, is the amount of legal fees. He stated that his bankruptcy partner doubled his bankruptcy fee under the new law because of the amount of extra legal work required by the new bankruptcy law. Many consumers will be financially unable to file bankruptcy. The author doubts that credit card companies will actually see increased debt collections because more of their customers cannot take advantage of bankruptcy protection. If people can't afford a bankruptcy attorney they also likely cannot afford to repay credit card debt.

I agree with the comment to the TPM Cafe Blog. Most of my  own bankruptcy clients under the new law could qualify under the means test, and nearly all of our new clients in November are below median income and automatically qualify for the means test. It has always been my experience that people file bankruptcy as a last resort, and when they do file, they feel ashamed and embarassed about it. Few people who can afford to pay their debts seek bankruptcy as the easy way out. Most bankruptcy debtors have either little income or they have suffered devastating financial events such as illness or divorce.

posted by Jonathan Alper, asset protection and bankruptcy lawyer, Orlando, Florida