With bankruptcy on the rise, debtors are looking for cheap, low-cost bankruptcy and how you can get one

In today’s dire American economic and unemployment climate, with rapidly increasing bankruptcy filings becoming the norm, more and more consumers are looking for low-cost, low-cost bankruptcy, usually without an attorney. They are looking for a non-lawyer bankruptcy filing system that provides an affordable, cost-effective bankruptcy, while giving them the same result as using a high-priced bankruptcy attorney—with a bankruptcy court document showing that you have officially declared BANKRUPTCY.


On October 17, 2005, amid intense drama, strong promises, and high expectations, a new “reformed” bankruptcy law passed by Congress, the Bankruptcy Abuse and Consumer Protection Act of 2005, or BAPCPA, went into effect. Driven largely by the powerful, well-funded credit and finance industries, among other special interests, the legislation was billed as a bankruptcy cure—all of which would fix America’s “broken” bankruptcy system. In principle, it would reverse, or at least dramatically reduce, the high volume of bankruptcy filings and the use of bankruptcy by American consumers to resolve their debt problems. The main argument and premise by proponents and supporters of the banking and financial industry reform law for the law’s enactment was that the steady upward trend in bankruptcy filings at the time was primarily due to “fraudulent bankruptcy filings” by consumers. the “excessive generosity” of the old bankruptcy system, as it was called, encouraged “abuse” and allowed large numbers of debtors to walk away, at least in part, from debts they could reasonably afford. Unfortunately, in almost all of the discussion surrounding the enactment of the 2005 law, there is virtually no mention of whether debtors can find or pay for or obtain low-cost or low-cost bankruptcy filings through bankruptcy attorneys or bankruptcy trustees. or no discussion. without it.

The stated and still undisputed mechanism by which the new 2005 law accomplished this primary goal of the new law was to force debtors who could essentially repay a portion of their debts to file bankruptcy instead of Chapter 13. 7. That is, filing a type of bankruptcy (Chapter 13) that requires paying back the debt, or at least part of it. To summarize briefly, by first limiting access to eligibility for Chapter 7—primarily as determined by calculating the “means test” of a debtor’s income—the new law was supposed to dramatically eliminate and limit the number of debtors who file for bankruptcy.

Well, it’s been 4 years since BAPCPA went into effect today, and has it achieved the stated mission of its sponsors? If so, to what extent so far?

In fact, for the first few years after the law’s introduction in October 2005, the original goal of that law, at least in dramatically reducing the number of bankruptcy filings, seemed to be more than achieved. actually dramatically exceeded it. Immediately following the law’s enactment, the years immediately following the law’s passage saw a clear, strikingly dramatic drop in the number of bankruptcies in the system—filings increased from 1,597,462 in 2004 (the previous last normal filing year). new law was passed), totaling 590,544 in 2006 and 826,665 in 2007. After 2005, there were basically no low-cost or affordable bankruptcy filings under this law. at the time, they were mostly intimidated by lawyers’ general chatter about the supposed “complexity” of the new law, and simply used lawyers to file for bankruptcy.

Thus, it is clear that the direct effect of the new law, at least immediately after its enactment, was to force large numbers of debtors entirely out of the range of Chapter 7 options as it was actually intended. only in the event that they are forced to pay off at least a portion of their debt in Chapter 13, thus significantly increasing the proportion of debtors who have paid off a portion of their debt. For example, in the years before the new law in 2005, Chapter 7 bankruptcy filings accounted for about 70% of all non-business or consumer bankruptcies (in 2004, the year before the new law took effect in 2005, this was exactly was 71.5%), Chapter 13 bankruptcies are about 30% or less. Post-2005 bankruptcy filings for earlier years after the 2005 law, however, showed a marked increase in the number of Chapter 13 bankruptcies, an additional 10%. Thus, for example, the number of Chapter 13 bankruptcies filed in the 12-month period ending in December 2007 (321,359) was 39.1%, rather than the usual 30% of total consumer filings for that year.

The situation described so far was the situation that obtained with regard to the PREVIOUS period after the new 2005 law came into force. But now, the AFTER cycle – fast forward to today, July 2009. And what we find is that American debtors are once again rapidly returning to the same high bankruptcy filing levels as before 2005. In fact, informed expert forecasts suggest that we will soon be back to the same old “square one” highs in bankruptcy filings – the “bad” pre-2005 “reform” high bankruptcy filing levels. The law passed by Congress was intended to provide treatment and reparation.

According to the Automated Access to Court Electronic Records (“AACER”), there were more than 120,000 bankruptcy filings in the United States in May 2009, or more than 6,020 bankruptcy filings for each of the 20 business days in May. also shows that for the first time daily bankruptcy filings have exceeded the rating. 6,000 marks since the enactment of the bankruptcy law in 2005. According to a widely respected expert on bankruptcy filings, Professor Robert Lawless A University of Illinois Law professor whose calculations put the average daily filing rate for 2004 (6,339) as a “benchmark” for the pre-2005 filing rate is the filing trend America is seeing now, and it’s already peaking. -The 2005 mark and now the long-term trend is directly toward the same filing rate as before the passage of the 2005 bankruptcy law.

Thus, on an annualized basis, May filings continue to track the projected presentation of 1.45 to 1.50 million bankruptcies this 2009, depending on how well the current trend matches or deviates from the bankruptcy filing trend. the rest of the year.


It is clear that the “reformed” 2005 BAPCPA failed in its FIRST primary goal of sharply limiting the upward trend in bankruptcy filings by American debtors. But beyond that, there is another very important, indeed more profound, way in which this law has failed the American debtor: it has made the bankruptcy system harder and harder and more expensive. and even inaccessible to debtors. For example, existing law among the original anti-debt provisions of this new law:!

== now makes it harder for borrowers to pay off certain types of debt

== now forces more debtors to repay their debts

== now imposes special responsibilities and restrictions that are unusual even for bankruptcy lawyers and bankruptcy preparers (for example, lawyers must personally vouch for the accuracy of debt and financial information provided by their clients and do more unnecessary paperwork), thereby making bankruptcy attorneys more expensive also gives more excuses to increase

it now imposes huge restrictions and unnecessary scrutiny on Bankruptcy Filers

(The name given to non-lawyers who assist debtors in their cases under the Bankruptcy Code

bankruptcy filings, generally lower costs), the net result of which has been to prevent adequate relief for bankruptcy petitioners and thus drive them to the offices of bankruptcy attorneys who charge approximately 50 times the BPPS fee to do the same. for the debtor

it now imposes a new requirement (and additional expense) requiring borrowers to undergo credit and budget counseling and

filing bankruptcy comes with a mountain of paperwork, documents and procedures that can be quite daunting for anyone to file for bankruptcy.


But perhaps the biggest anti-debt result of the new law — the result most experts say was intended by the banking and lending industries, the main sponsors of the new law — is more paperwork and unnecessary added complexity and protocol to the bankruptcy process, which lawyers made it possible to find an excuse and justify the fees and costs of filing for bankruptcy. As a result, the costs of filing for bankruptcy after the 2005 law have become extremely high, virtually unaffordable for the average bankruptcy petitioner. Today, the average attorney fee for a simple bankruptcy in some parts of the country is as high as $2,500 for a simple Chapter 7 bankruptcy, and around $4,500 for a Chapter 13. debtor who wants to declare bankruptcy. For many debtors, this leaves the low-cost non-lawyer bankruptcy method as the ONLY realistic, practical, yet affordable and effective alternative to using attorneys for their bankruptcy.

But do not despair. There are still some open avenues for borrowers!

Here’s the good news, though. It is true that filing for bankruptcy under the new law passed in 2005 has become much more difficult and certainly more expensive than before. However, even under the new law, filing for bankruptcy, especially Chapter 7, is still a fairly straightforward process for many filers. This is especially true when you (the debtor) do so using a unique alternative system to the traditional use of bankruptcy attorneys—that is, a non-lawyer, self-help system, or a system that uses an authorized trusted Debt Relief Agency or Full Service. Bankruptcy File Preparer When doing your bankruptcy filing. For a fraction of the attorney’s fees, this type of service can often be one of the smartest, most cost-effective, and also the most efficient services available, utilizing qualified individuals with great skill and competence in the process of preparing the required bankruptcy documents for the debtor. a simple alternative to bankruptcy.

For more information on ways to get bankruptcy at low or low cost, affordable but with high quality and reliability, or how to find the oldest and most reliable agencies specializing in providing such service and purpose, visit: http:// www .afford-bankruptcy.com

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