BAPCPA, Two Years Old Today - Part One
By Peter Orville, Attorney at Law on Oct 17, 2007 in Bankruptcy Myths, General Bankruptcy Information
Two years ago today BAPCPA, the new bankruptcy law, went into effect. BAPCPA was sold to Congress as a necessary means to force people who earned a decent income to repay more to their creditors. In reality, in many cases under BAPCPA, people with higher incomes actually are paying LESS to their creditors than they would have under the old bankruptcy law. This was not clearly the case right after BAPCPA went into effect, but over the past two years Bankruptcy Court decisions throughout the nation have recognized that there is now a two-tiered bankruptcy law…one for those above the median income for their state and one for those below the median income. Many advantages are now given to those above the median income that are not available to those under the median.
What BAPCPA really shows is that the interests of Big Finance were able to effectively lobby Congress (eg. buy Congress) to produce what they thought would be a law making it much more difficult to file bankruptcy for people in need of a fresh start or a desperate need to reorganize their financial mess. BAPCPA also shows that when interest groups with limited knowledge of how the bankruptcy process really works try to write a bill, they often fail to create a law that can work in the real world.
See many of the previous blogs on this Bankruptcy Law Network for more examples of how BAPCPA has not achieved its stated goals.
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