The Cost Of Bankruptcy Keeps Increasing
As a consumer bankruptcy attorney, I see first hand how the bankruptcy code and bankruptcy rules play out in the courtroom and creditor's meetings on a daily basis. It seems to me that a great deal of unnecessary costs (administrative and non-administrative) are being placed upon individuals filing for bankruptcy protection.
According to one study from the American Bankruptcy Institute Law Review, the costs of bankruptcy of increased since the bankruptcy law changed in 2005. The article found that consumer debtors filing for Chapter 7 and Chapter 13 protection in the years after 2005’s Bankruptcy Code overhaul (BAPCPA) face costs up to 55% higher than those who filed in 2003 and 2004.
The author of the study, Lois Lupica, found that the burdens and requirements of the 2005 Bankruptcy Code overhaul is also costing lawyers, trustees and creditors more money. This presents the question, if all the parties to a bankruptcy action are losing money as a result of BAPCPA, what can be done to increase the orderly liquidation of assets? Or more importantly, if the system is so broken, what did Congress really fix in 2005 when they changed the bankruptcy code to protect Debtors?
Our country is in the midst of the biggest economic downturn since the Great Depression. People can’t afford to pay their bills because the economy has taken their jobs. Now is not the time for the federal government to create more road blocks and deter people from filing bankruptcy, or alternatively, protecting their rights as creditors in a bankruptcy, because of the costs required by BAPCPA. Many of these additional costs can be eliminated with an amendment to the Bankruptcy Code.
This blog was submitted by Jeremy Iskin, Esq. of The Dellutri Law Group, P.A. Mr. Iskin focuses his practice on the representation of consumer debtors in Chapter 7 and Chapter 13 bankruptcy.
