By: Gerri L. Elder
When the mortgage market turned sour, many Americans were left with more debt than they could handle. Unfortunately, rising food and fuel prices have only worsened the financial situation in much of the country.
While filing bankruptcy has traditionally provided an escape route for those whose financial obligations have gone beyond their control, the 2005 changes to bankruptcy laws may mean that, because of new filing requirements, some cash-strapped Americans may actually be too poor to get the protection bankruptcy offers.
A recent article in the Wall Street Journal describes how the cost of bankruptcy has risen dramatically since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) took effect in 2005.
According to the WSJ, the new requirements introduced by BAPCPA, including the means test in Ch 7, translate to more hours of work for bankruptcy lawyers handling cases. This, in turn, means that lawyer's fees are higher for those filing bankruptcy.
A report from the U.S. Government Accountability Office apparently found that the increase in fees comes to about 51%, to more than a thousand dollars for Chapter 7 cases filed in February and March of 2007. Before BAPCPA, lawyer's fees were reportedly just over $700.
And for those looking to file under Chapter 13 bankruptcy, lawyer's fees have risen to about $3,000, from $2,000 before the law change.
But those filing for bankruptcy have been hit with other fees, as well: accountability fees have risen $90 for Chapter 7 cases and $80 for Chapter 13 cases, sources indicate; further, the BAPCPA-mandated credit counseling requirement and debtor education course cost bankruptcy filers extra money.
All of this has evidently led the President of the National Association of Consumer Bankruptcy Attorneys to declare that increased costs of filing bankruptcy are serving to prevent needy Americans from filing - and therefore from getting the protection they so badly need.
Consumer advocates have often denounced BAPCPA as unfairly benefiting large credit card corporations and penalizing Americans who are genuinely in need of financial relief.
Indeed, it seems credit card companies spent tens of millions of dollars over a decade lobbying for the changes to bankruptcy law which eventually passed as BAPCPA. Considering the origins of this legislation, it's hardly surprising that its requirements mean that many struggling Americans are literally finding themselves too poor to file bankruptcy—and therefore still obligated to pay their creditors.
So what choices do you have if you're struggling with your finances? Luckily, Total Bankruptcy can put you in touch with a bankruptcy lawyer in your area for a free, no-obligation consultation.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.