The changes made to the Bankruptcy Code in 2005 significantly increased the cost of filing for bankruptcy for consumer debtors without producing a statistically significant increase in creditor recoveries, according to a recently completed study funded by the American Bankruptcy Institute H.N. Schnelling Endowment Fund and the National Conference of Bankruptcy Judges Endowment for Education.
The study looked at what it cost a consumer to file for bankruptcy before and after the changes took effect. The study showed that the hardest hit were debtors who filed no asset Chapter 7 Bankruptcy Cases, with an increased cost of approximately 51 percent.
In Chapter 13 cases, the TDAC increased by 24 percent dismissed cases and by 27 percent in cases where the debtor received a discharge.
"It takes more skill and experienced to responsibly and professionally represent consumer debtors--especially in this economic climate--than it used to. "Moreover, the system is less tolerant of mistakes and yet there are so many more opportunities presented by BAPCPA for even seasoned attorneys to make errors. Without a detailed understanding of how to make the system work, the temptation is there for lawyers to 'cut corners' in order to minimize time spent on a client's case, or conversely, to spend so much time on a case that the legal fee exceeds what an insolvent client can reasonable afford.
Efficiency coupled with a high level of skill, while important to every area of law practice, is crucial to the success of a consumer bankruptcy practice. Best practices' for consumer bankruptcy lawyers requires finding a balance between comprehensively addressing a financially distressed client's interests, and doing so in a time sensitive and efficient manner", the report stated.
The Law Offices of James V. Sansone assists individuals file for bankruptcy protection under the United States Bankruptcy Code. We are located in Santa Rosa, California and serve clients throughout Sonoma County, Mendocino County, and Lake County, including Santa Rosa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport, and Kelseyville.