Bankruptcy Lawyers Weighing In on New Law

It’s called the Fairness in Bankruptcy Reform Act, and by now you know it’s anything but. Now that we know what it says, the lawyers who represent people filing bankruptcy are pointing out the specific problems the new statute will cause for them and their clients. Here’s a story about it from Business First of Columbus, Ohio.

Here are the three main problems they point out in the new bankruptcy statute, which will become effective in October:

  • Bankruptcy lawyers who represent debtors will be required to certify the accuracy of their clients’ list of assets, and if they’re wrong they could face court sanctions. Bankruptcy lawyers tell me their response to this requirement will be to hire an independent auditor to investigate their clients, which will of course drive up the cost of bankruptcy.
  • Bankruptcy lawyers will be required to certify their clients’ ability to make scheduled payments, which will dramatically increase the liability exposure of bankruptcy lawyers, which will in turn drive up their legal malpractice premiums.
  • Bankruptcy lawyers will be required to advertise themselves as “debt relief agencies,” which will require that they provide a great deal of financial advice to their clients that they are not now providing.
  • 3 comments

    1. jenn ikner says:

      I really am in need of advice from an expert. My siblings and I are in need of someone to advise us with a very serious situation. Our mother is in the early stage of alzheimers. She remarried about five years ago before the onset of his condition. The husband doesn’t drive nor does he have money set aside for his retirement. The point I’m trying to make is he depends on our mother to drive him to the pharmacy & doctor’s office on a routine basis. We are quite concerned about our mother because she has started exhibiting very bizarre behavior lately. We confronted the husband to ask if he too had noticed this behavior and he said she’s fine. We think he doesn’t want anyone to interfer because he depends on her for transportation as well as money. In the state of Alabama, what legal recourse do we have as her children and does his authority supersede ours. We would like to get power of attorney to have her evaluated by a neurologist to determine what her condition really is because we don’t know what’s going on with our mother. Please help!

      Thank you,

    2. Warner says:

      Our daughter is getting divorced…not yet finalized because they can not come to an agreement on the division of property & financial obligations/she lives in Florida … she and the soon-to-be spouse ran up a great deal of personal debt while married … our son-in-law had our daughter transfer numerous credit card debt over to one credit card in her name … at his insistance they took out a line of equity loan on their home to purchase an investment property with the plan to “flip” and make a profit/needless to say this never happened due to the housing crisis … although he has not lived in the marital home for over 1 yr, and they are upside/down on the value/to what is owed on the mortgage & line of equity loans, he refuses to sign the deed over to my daughter to allow her to renogiate with the lending institutions … our son-in-law filed for BANKRUPTCY/CHAPTER 7 in August and has stopped giving our daughter any money to pay for 50% of the debt owed .. he has left our daughter to the mercy of the creditors who are now looking to her for payment … since he is now refusing to give her any money for his half of the debt she has been unable to pay the mortgage (is 2 mos behind on payments) and the mortgage company refuses to negotiate with her because of the bankrupcty … on the investment property, since they have not been able to sell it they have had a renter for over a year /our son-in-law has collected the monthly rent and my daughter recently found out they are behind 2 mos+ in making the mortgage payment, which means our son-in-law has pocketed the rent $ / recently my daughter had to payout $500+ in AC repairs for the tenant… in the meantime, our son-in-law earns over 60K in salary plus yearly bonuses and has walked away from all debt, drives a car owned by both of them that is paid for, only makes $300 child support payment (for 1 child – 6 yrs of age), and is getting himself setup in a high-end apartment to live in while enjoying a social life of high-end restaurant dinning, huge bar tabs, gambling trips to Vegas with his buddies, etc … what can my daughter do to keep from losing the home and a car, which they both recently purchased and is her primary source of transportation to work … NOTE: my daughter is a school teacher and does not get paid during the summer months, Christmas and Spring holiday breaks … QUESTION: How can my son-in-law walk away from his debts and financial obligations by filing bankruptcy leaving my daughter in a situation that could leave her homeless with a child? … especially when he is financially able to meet part, if not all of his obligations? … what recourse does my daughter have?

    3. Lee Borden says:

      Your daughter got herself into this mess, and with all due respect, she’s going to need to be the one to get herself out. He still is required to pay child support, and the sooner she gets that set up and begins collecting it the more manageable all the other problems are going to be. However, given her limited resources and crushing debt, it’s entirely possible she’s going to need to join her STBX in bankruptcy. That may the best thing for her, because it would allow her to have a fresh start and would impose some discipline on her that she and her STBX apparently lacked during their marriage.

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