The Wall Street Journal's Bankruptcy Beat blog reported on a new study from the American Bankruptcy Institute Law Review concluding that consumers pay substantially more to file for bankruptcy following the 2005 changes to the law.
And it's not just consumers, according to the study's authors.
Increased costs and time spent on Chapter 7 and Chapter 13 filings following passage of 2005's Bankruptcy Abuse Protection and Consumer Protection Act also are passed onto trustees, creditors and even Atlanta bankruptcy lawyers.
The figures are staggering: Consumers filing for bankruptcy after 2005 pay costs of up to 55 percent higher than consumers who filed in 2003 and 2004. Lois R. Lupica, who authored the study, said there's no question in her mind that it costs substantially more now:
"It costs debtors more, it costs attorneys more, it costs Chapter 7 trustees more, in terms of time, and it costs Chapter 13 trustees more in terms of time and effort."
One of the reasons she gives is that unsecured creditors, including credit card issuers, are seeing smaller and smaller recoveries as a result of the new law. But since they often put in the same amount of time and effort as before, the payoff represents a net loss from before the 2005 law went into effect.
Regardless, she pulled back from making sweeping conclusions and said the findings -- based on data from 2,000 cases -- represent the "pilot" portion of the research. The complete report, based on 10,000 cases, is slated for a 2011 release.
The median cost for consumers in Chapter 13 cases was $2,930 in 2003 and 2004, increasing to $4,077 in 2007 and 2008; Chapter 7 cases during the same periods increased from $900 to $1,399.
If you're concerned about the cost of a bankruptcy filing, you may want to review your options with a bankruptcy attorney in Atlanta.
Related Resources:
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Find an Atlanta Bankruptcy Lawyer (FindLaw)
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Record Bankruptcy Filings in 2005 (FindLaw's Common Law Blog)
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