Consumers Race to File Bankruptcy Petitions
The new bankruptcy law is bringing the LATM folks out in droves to file before the law changes on Monday. Yikes!
"...Across the nation, about 100,000 petitions were filed in the first three days this week, according to Burlingame, Calif.-based Lundquist Consulting, which compiles bankruptcy statistics. The firm said 102,863 were filed last week, a record expected to fall.
The new law, the most sweeping reform of the U.S. Bankruptcy Code in decades, takes effect Monday, setting new limits on personal bankruptcy filing and requiring people to get professional credit counseling before they may file petitions. It will prohibit most filers with above-average income from filing Chapter 7 petitions that allow debts to wiped out.
Instead, people deemed by a "means test" to have at least $100 a month left over after paying certain debts and expenses will have to submit a five-year repayment plan under the more restrictive Chapter 13.
At the U.S. Bankruptcy Court here, clerk Brad Bolton said the number of filings set a record every day this week, with nearly 2,000 filed on Thursday alone.
"We've never seen anything like this," he said, standing in a corridor near the courthouse door. "Every day has just gotten worse than the day before.""
Work? I don't have time to work....I'm retired.