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LEGAL NEWS from Law
Disks
Bankruptcy
New Bankruptcy Petition Required by U.S. Courts,
- NACBA Study Finds that Only 3% of Debtors in Credit Counseling Can Pay their Debts-- hence almost all debtors will continue to qualify for bankruptcy
- What does "bankruptcy reform" mean for practitioners?
- Student Loan Nondischargeability Limited
- ABI Study finds that only 3% of debtors could pay 20% of their debts
- Study
shows that more women file bankruptcy than men
"Bankruptcy Reform" Enacted:
Law Disks has upgraded Bankruptcy Disk to comply with the Bankruptcy Reform Act. We have the 2008 changes to the State Median Incomes and the IRS Expenses too! Click here for more details.
Summary: Congress passed the bankruptcy "reform" bill. The law will apply to new bankruptcy cases filed on/after October 17, 2005. Cases filed on/after October 17, 2005 will need new bankruptcy forms.
Some important points: Nearly all debtors in financial trouble will be eligible for bankruptcy chapter 7 under the 2005 amendments. Most persons in financial trouble have incomes below the State Median income. These folks can continue to file chapter 7. Let Bankruptcy Disk be your guide through the new requirements.
Click here to Order, and pay by check.
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NACBA Study Finds that Only 3% of Debtors in Credit Counseling Can't Pay their Debts
97% of debtors sent to credit counseling since the start of the new bankruptcy law could not afford a payment plan, according to a study by NACBA of data from credit counseling agencies. The study casts doubt on the reasons given for enacting the 2005 Bankruptcy Act.
For attorneys, the study shows that 97% of the clients coming into a law office are going to be eligible for bankruptcy. To read the press release about the NACBA study, click here. Law Disks has what attorneys need to file bankrupcy under the 2005 bankruptcy Act. Click here for more information about Bankruptcy Disk.
History of the 2005 Bankruptcy "Reform" Act:
2005: Passed by the U.S Senate. No amendments allowed. April 2005: Passed by the U.S. House of Representatives. No amendments allowed. Sent to President for signature. Pres. Bush signed into law. Effective date: law applies to petitions filed on/after October 17, 2005.
2004: a quiet year: Conservative opposition to Senator Schumer's amendment (no discharge in bankruptcy to those who use violence against abortion doctors) is blocking the bill, and perhaps the election causes the subject to drop. More than a million average voters file for bankruptcy each year.
2003: The full U.S. House had passed bankruptcy "reform" in March 2003. However the Senate did not act on the bill.
In 2002, the House and Senate reps agreed on a Conference Report for a new bankruptcy code. However, the Republican supporters of abortion protesters defeated the Conference Report, joined by opponents of the bill.
Previously President Clinton vetoed a bankruptcy "reform" bill.
The bills have had a 6-month phase in before they are effective. If the two houses pass the same bill and reconcile their differences, it will mean big changes in bankruptcy law and practice. The conferees need to agree on one version of the bill.
On July 26, 2002, the conferees came to an agreement on a Conference Report, but that report was defeated. Prior versions of the bill state that the bankruptcy reform would go into effect six months after enactment.
Yet bankruptcies are being filed at a record rate, and the rate will increase if Congress passes this bill, as debtors rush to beat the draconian law. Practitioners will need a copy of Bankruptcy Disk for the last-minute filings under the old law.
Back to 2005:
Important: the reform bill has been ienacted, but it will not go into effect for six months.. In the meantime, bankruptcies re running at record levels, because the economy has worsened and debtors fear the reform bill will take away their right to go bankrupt. Whether reform happens or not, practitioners need to upgrade to software, such as Law Disks' Bankruptcy Disk, which has the administrative changes to the Official Forms. Law Disks has a very generous upgrade policy: a 50% discount. So those who purchase Bankruptcy Disk now, to deal with the flood of cases, will be protected if the reform goees into effect.
What does bankruptcy reform mean for practitioners?
The new law is not the end of the world. All debtors would have to get a certificate that they tried credit counseling. Debtors over state median incomes, Iwould have to enter Chapter 13 payment plans. However, the big picture is that debtors still have a right to file bankruptcy, and the state median incomes, adjusted for inflation, may exceed $50,000 in many states. So reports of the demise of bankruptcy may be greatly exaggerated.
The bills contain dozens of proposed changes in the law. The best site for research and commentary on the subject of "what is in the bill" is the National Consumer Law Center, which expects to publish a book about the new law.
Attorneys need to become familiar
with the proposals, as they impact debtors by restricting their
bankruptcy options severely. The National
Association of Consumer Bankruptcy Attorneys lobbied against
the measures, as did the National
Consumer Law Center.
Qhen the bill becomes law, the best source for consumer bankruptcy
attorneys will be "Consumer Law and Practice"
by Henry Sommer, John Rao and the National
Consumer Law Center. Get that book for the law,
Bankruptcy
Disk has the latest Official Forms.
Law Disks offers Bankruptcy DIsk via easy credit card purchase at our Internet store.
Student
Loan Nondischargeability Limited
The automatic discharge of government guaranteed student loans
after seven years was erased by a provision in the 1998 higher
education act. Now debtors who filed their bankruptcy petitions
after October 7, 1998 must prove an "undue hardship"
as the sole ground for discharge. P.L. 105-244 (H.R. 6), sec.
971.
ABI
Study finds only 3% of debtors could pay 20% of their debts over
five years
The American Bankruptcy Institute released a December 1998 study
which analyzed a random sample of 1,000 bankruptcy petitions
to see how many debtors would be able to pay 20% of their debts
in a five year bankruptcy plan. Answer: only 3%, and these tended
to be the high income bankrupts. You may check out the original
at www.abiworld.org/research/creightonstudy.html.
Bankruptcy
As a Women's Issue
A Study shows that more Women file bankruptcy than men: check
out the original research at http://www.abiworld.org/research/morewomen.html
Disclaimer
Law Disks provides software for legal forms intended to be used
by attorneys and real estate professionals. Law Disks does not
provide legal advice. Consumers should consult an attorney to
receive advice specific to their factual situation and needs.
Bankruptcy Disk (full automation)
HUD-1-DISK
Sample Forms in Adobe Acrobat
Bankruptcy Forms in NCLC Manual
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