2005 Bankruptcy Reform

2005 Bankruptcy Reform 2018-05-24T14:58:48+00:00

Congress for sale? By the year 2005, for many years big banks had contributed millions of dollars to Senators and Congressmen seeking “bankruptcy reform” due to the perceived notion that people were irresponsibly walking away from their debts without cause. Never mind the billions in profits the banks were earning by charging interest rates upwards of 20% or more after certain stressed consumers were labeled “slow pay” — which only pushed them closer to bankruptcy. Consumer groups fought the legislation.  But money talks, so Congress listened to the banks who were lining their pockets with “campaign contributions.”  Two years later, years of greed and irresponsibility by the big banks finally pushed the economy off a cliff from which we are still suffering today.

Despite these changes in the bankruptcy laws, most people who qualified for Chapter 7 bankruptcy before the new law still qualify for Chapter 7 today. The fact is, this “kick them when they’re down” legislation did NOTHING to slow the filing of consumer bankruptcies, according to the Associated Press.  Even if you “think” your income is too high to file Chapter 7 bankruptcy, in most cases we can find a way to get you into a Chapter 7 anyway.

In our bankruptcy practice, we find that people generally fall into one or more of the following three categories: Their bankruptcy is due to (1) divorce, (2) unemployment, or (3) medical disability or medical bills. Usually it is a combination of all three. In general, people do NOT simply run up large bills intentionally and walk away from them.

The truth of the matter. Very few people filing bankruptcy are well-to-do individuals trying to cheat the system and stiff their creditors. According to a 1999 study by federal bankruptcy judges, the average person filing for bankruptcy earns just $22,000 per year. Most have suffered a significant period of unemployment before filing.

According to a report by Consumers Union, publisher of the well-respected Consumer Reports magazine, 85% of elderly debtors cite medical or job problems as the reason for bankruptcy. Consumers Union also says that single moms trying to make ends meet make up a large portion of bankruptcy filers.

Half of all bankruptcies are triggered by sudden uninsured medical expenses, according to a Harvard study by Professor Elizabeth Warren.

Protect your right to bankruptcy relief — even under bankruptcy reform.   We will fight for your right to bankruptcy relief.   For example, in one of our firm’s cases, the U.S. Trustee moved to revoke the discharge of one of our clients.  The government reopened the her case and wanted to deny her a bankruptcy discharge based on nonsense from a vindictive former spouse.  In this particular case, our client was a single, impoverished, divorced woman. The U.S. Trustee’s Office refused to back off, despite all the evidence presented against the government’s dubious allegations.  It seemed as if they were just out to make a point, inexplicably ignoring the truth of the matter and the real facts.

Following trial, a United States Bankruptcy Judge found in favor of our client, ruling against the U.S. Trustee and upholding the client’s discharge of her debts.  This client preserved her right to walk away from tens of thousands of dollars of debt.  Selecting a good Denver Bankruptcy Lawyer can make or break your bankruptcy.

We guarantee: An accurate bankruptcy filing, not just a “fast” filing. Nothing destroys your credibility faster with the bankruptcy court — and causes unwanted scrutiny — than a bankruptcy filing that is incomplete, inaccurate, or that otherwise doesn’t cross-check properly from schedule to schedule. We file your case fast. But we make sure it is done right. By ensuring an accurate bankruptcy filing that makes factual and mathematical sense, we help to minimize the scrutiny your case receives from the U.S. Trustee’s Office. Complete legal analysis and cross-checking is something you cannot get and will not get from an unlicensed document preparation service. Just ask our past clients!