The American Bankers Association is telling the Arizona Republic that the new bankruptcy laws (which will have it’s first anniversary on Tuesday, October 17) is working as it was intended. Fortunately, there is more than one source for news. Delaware Online reports that after one year, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is not quite doing what bankers had hoped or paid for.
Certainly, bankruptcy attorneys – including yours truly – would agree that there has been a substantial drop in case filings. A Toledo Blade report attributes the drop in filings to higher legal fees and a “difficult” income test. Most bankruptcy attorneys have had to increase their fees since October 17, 2005 due to the increased work on a typical bankruptcy. In many cases, the work has doubled than it was under the old law. However, I am not convinced that the means test is “difficult.” While it’s an extra form, and more paperwork, I cannot say however, it is “difficult.”
What remains difficult is the struggle people face in dealing with debt that’s grown out of control. That difficulty is only intensified when debt collectors get ugly. From the Pittsburgh Post-Gazette, this year the Pennsylvania Consumer Protection Bureau has received the highest number of complaints against abusive debt collectors than any other industry, such as telephone companies:
Take the case in which a collection agency telephoned a woman’s 5-year-old daughter, ordering her to tell her deadbeat mommy that she’d better pay her credit card bills.
I have to wonder: did the bill collector also tell the 5-year-old that mommy could not file bankruptcy anymore because it was too expensive and there was a difficult income test? I hope not. Debt collectors are not supposed to lie.
Related posts:
- Median Income Figures Adjusted
- Still Thinking About Credit Counseling?
- Audits of Bankruptcy Petitions
- The Sunday News
- NACBA Challenges New Bankruptcy Law
Tags: Bankruptcy, Credit and Debt, Fair Debt Collection Practices
Here’s my debt collection story – a debt collector called the adult daughter of one of my clients to express condolences over the death of the adult daughter’s mother. Of course, my client was not dead – it was a ruse to get her to call the collector. Charming, isnt’ it?
Here in Atlanta, my filings are down for two reasons – the process is much more complicated and requires a lot more documentation, and because the process is more complicated it is also more expensive. If the purpose of the new law is to drive down the filing numbers by making the cost (both in terms of time and money) prohibitive, it has succeeded.