November 25, 2017

Top Time Wasters in the Bankruptcy Process

If you have read my blog at all, you know that I have been quite critical of many of the changes brought about by the BAPCPA changes to the bankruptcy law.  In general these changes have make the process of filing bankruptcy more complicated and more expensive.  Sometimes, I have to decline representation in cases with complications because the potential client cannot afford to pay me for the time it would take to untangle his/her mess.

Lest you think that I am alone in my attitude about the current bankruptcy law, take a look at this blog post by South Carolina bankruptcy lawyer Däna Wilkinson on the Bankruptcy Law Network blog.  Däna entitles her post "Top Ten Wastes of Time After BAPCPA" and she discusses the wastes of time for both debtors and their lawyers.

In my view the whole median income/means test income calculation using gross income numbers from the six months prior to filing is the biggest waste of time.  Why should your eligibility for Chapter 7 today be a function of your income over the past six months.  At least in the Northern District of Georgia, bankruptcy judges have been open to the idea of tossing out the six month lookback if your current income situation has changed.

These medican income/means test calcuations can take several hours and, at the end of the day, the results tell us nothing about the debtor’s current capacity to pay creditors.  But, because I have to spend my time processing the numbers, my fees have gone up.  What a waste of time for no good purposes.

Close behind the median income/means test requirement are the credit counseling/financial managment course requirements.  Basically these required education courses offer very little useful information to a bankruptcy filer, but they do add around $100 to the cost of filing – $50 for the certificate to get in and $50 for the certificate to get out.   If there is a point to this surcharge, it escapes me.

Take a look at Däna’s article – it would be interesting to hear from both debtors and debtor’s lawyers – what do you think?

[tags] credit briefing, financial management, means test, median income test, bankruptcy law network [/tags]

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.

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