07 Apr Does BAPCPA Create Additional Hurdles For Debtors With Health Problems When They File For Bankruptcy?
There is an interesting and informative bankruptcy article in the Fall 2006 Missouri Law Review, a publication of the University of Missouri School of Law, which addresses the potential impact of the Bankruptcy Abuse and Consumer Protection Act (BAPCPA) on those potential debtors with health problems.
In the article, entitled “Bankruptcy Reform and the Costs of Sickness: Exploring the Intersections”, Melissa B. Jacoby, a Professor of Law at the University of North Carolina at Chapel Hill discusses the findings of various researchers that had conducted research on both the direct and indirect effects that medical debt has on the decision of a potential debtor to file for bankruptcy.
The scope of Professor Jacoby article cannot be given justice here, and her article warrants reading. This article instead focuses on her discussion of the new financial hurdles that BAPCPA has placed in the way of the debtor who is in poor health.
Professor Jacoby identifies three primary financial hurdles resulting from BAPCPA: increased filing fees, fee based counseling requirements and increased cost of legal fees.
The first of these financial hurdles is the filing fee. For the debtor considering a Chapter 7 bankruptcy the fee has increased from $209.00 in 2005 to the today’s cost of $299.00, with yet additional fee increases being proposed.
The second hurdle is the BAPCPA requirement of fee based credit counseling before a bankruptcy can be filed and a financial management course before as much as $100.00. These counseling requirements are viewed by many, as a costly, unnecessary and demeaning addition to the bankruptcy code.
The third and final hurdle cited by Professor Jacoby is the increased cost of legal services themselves. BAPCPA has increased the paperwork that must be prepared by the attorney as well as increased the personal responsibility placed upon the attorney for mistakes in a debtors’ paperwork. These changes have forced most attorneys to increase the fees that they charge to prepare a bankruptcy.
While Professor Jacoby notes that it will take research to determine how these cost increases will affect the system and potential debtors, she does suggest that for at least some, the increased costs will keep them from filing for bankruptcy altogether or alternatively, they attempt to prepare and file their bankruptcy themselves (pro se) at the risk of errors that would be avoided if an attorney prepared their bankruptcy.
An experienced consumer bankruptcy attorney can advise you on ways to fund the cost of a bankruptcy.
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