As Fontana consumer bankruptcy lawyers, we had reservations about the bankruptcy reform act of 2005. Formally called the Bankruptcy Abuse Prevention and Consumer Protection Act, the law's stated goal was to stop alleged abuses of the bankruptcy code. Critics at the time said that it was intended to protect the profits of lenders by making bankruptcies harder to get. According to the Wall Street Journal's Bankruptcy Beat blog, bankruptcy professionals thus far have different opinions about what exactly it has done, but agreed that it has had unintended consequences. The Oct. 4 post said the professionals met through a teleconference sponsored by the American Bankruptcy Institute to mark the fifth anniversary of BAPCPA taking effect.
The post noted that BAPCPA had been controversial from the start. However, it said, some of the consequences judges and attorneys have seen were not predicted by proponents or opponents of the law. For example, a business bankruptcy attorney criticized the restrictions imposed by new Chapter 11 rules on companies' ability to move money around. Because the new rules require companies to pay more of their debts before they can discharge the bankruptcy and start over, he said, Chapter 11 bankruptcy takes longer. A colleague added that this requires more work from accountants, lawyers and others, which also makes the process more expensive and drives some companies out of court entirely. A third attorney criticized BAPCPA for taking away courts' flexibility to consider each individual situation, which ultimately hurts businesses. And a Milwaukee bankruptcy judge said she believes the law is so unclear that she is sometimes forced into unfair decisions.
This blog post discusses the problems with BAPCPA from a business and judicial standpoint, but we have written in the past about some of the problems it has created for individuals and couples. As with the Chapter 11 complaints above, consumer bankruptcy complaints about the law are typically about decreased flexibility and greater barriers, leading to more expense for filers. Our Rancho Cucamonga individual bankruptcy attorneys believe it is ironic and wrongheaded to ask bankrupt people to spend more money that they don't have. Bankruptcy is intended as a tool to help people (and companies) who are debt in over their heads to get out of it and eventually regain a solid financial footing. Adding more expense to the process may not be intended to drive them away from bankruptcy and prolong their misery, but this is the reported effect of BAPCPA, in consumer bankruptcies as well as in business bankruptcies.
At Howard Law PC, we try to make our clients' bankruptcy experiences as painless and quick as possible. Filing for bankruptcy is a big decision, and it's one that many clients put off because of feelings of shame or failure. Our Dana Point personal bankruptcy lawyers believe this can be a big mistake. At best, it just prolongs the time during which you must deal with aggressive, harassing creditors and anxiety about your finances. At worst, it can actually cause you to burn through assets that might otherwise be protected in a bankruptcy, such as many retirement accounts. If you have done the math and believe you cannot pay your debts back fully within a few years, we recommend that you look into bankruptcy. If you are not sure, please take advantage of our firm's free consultations, at which we can help you make those calculations and perhaps get started on the road to a clean financial future.
If you're overwhelmed by your debt and you don't think you can handle it on your own, Howard Law can help. To learn more or set up a free, confidential evaluation of your case, call us today at 1-800-872-5925 or send us a message through the Internet.