From today’s Washington Post comes this story about the increase in bankruptcy filings ahead of the new bankruptcy law which goes into effect on October 17th.
Normally sleepy bankruptcy court clerk offices around the region and the country yesterday overflowed with filers beating the deadline before tougher new bankruptcy rules take effect Monday.
In most instances, 4 p.m. yesterday was the last time that those filing paper claims, most of whom were seeking bankruptcy protection without lawyers, could do so. Over the weekend, bankruptcy courts will continue to accept filings over the Internet from lawyers with access to the court electronic case-filing system. Paper filers in Maryland may file over the weekend at a drop box at the federal building in Baltimore.
At the U.S. Bankruptcy Court clerk’s office in Alexandria yesterday, 420 cases — all of them personal bankruptcies — were filed as of 5:30 p.m. But most were electronically filed. Charles Miller, division manager of the Alexandria court clerk’s office, said the office handled 47 paper filers yesterday, much more than usual but nothing the clerk’s staff couldn’t handle. Before bankruptcy filings began to surge last month, the Alexandria court rarely saw more than 10 filings in a day. Similar increases were reported at the bankruptcy courts in the District and Maryland.
“We were surprised by how well prepared the filers were in general,” Miller said. “They had done their homework. They just waited until the last minute.”
The line of filers stretched out of the clerk’s office waiting room in the late afternoon.
Last week, a bankruptcy attorney I know well who has been practicing for more than 20 years told me that his firm had never been as busy with new filings in the past month. Its not surprising, the new law will make it much more difficult for most people to obtain a discharge and will increase the legal fees associated with filing bankruptcy for everyone.
From everyone I’ve learned about the new law since its passage, it seems like a bad idea all around. Without question, I would not want to be a debtor’s attorney under the new law. The increased certification requirements, as well as other hoops that debtor’s need to jump through, just won’t be worth the relatively small amount of money that you make doing a Chapter 7 liquidation. So, I expect that you will have fewer attorneys handling these types of cases and legal fees will increase as a result.
I guess we can’t expect much more from a law that was bought and paid for by the credit card industry.
