Sunday, October 02, 2005

Foreseeable results

Among the perverse outcomes from the new U.S. bankruptcy bill, debtors are scrambling to file for bankruptcy before the bill takes effect:
Like most U.S. bankruptcy courts, the one for Northern California, in San Francisco, has been inundated with cases. Its Chapter 7 filings increased 32 percent in August and 125 percent in September from the same months last year.

So contrary to the bill's stated purpose of keeping people out of bankruptcy, it's actually pushing more of them into it for now...perhaps including people who could avoid it if they didn't see an advantage to filing now.

Meanwhile, the bill will also punish those who can't avoid bankruptcy later - and the punishment isn't limited to the more restrictive rules in bankruptcy itself:
Today, attorneys on average charge about $1,000 in cities and $700 to $800 in rural areas to file bankruptcies, says Steve Elias, author of "The New Bankruptcy: What It Will Do for You," from Nolo Press.

"That's going to double," Elias predicts.

Good to know that at least somebody stands to benefit from the bill. But on the balance, it's no less a disaster than it ever was.

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