Study Shows Bankruptcy Costs May Be Higher Due to Congress Reforms
presented by: Gary Massey
A new study shows that so-called “bankruptcy reforms” made by Congress have led to much higher costs for those filing, according to U.S. Politics Today. In 2005, Congress passed a bankruptcy reform act which made a number of changes to the bankruptcy code and aimed at tightening loopholes, setting higher bankruptcy standards, and eliminating bankruptcy abuses. Experienced legal professionals, however, are stating that the bankruptcy code changes are viewed largely as cumbersome as they have created many needless costs.
Before the 2005 changes, the average cost of a Chapter 7 bankruptcy case was $900. The study shows that this figure has drastically increased by more than 55 percent, costing $1,399 at the end of 2011.
Why did the reforms have such a significant effect on bankruptcy expenses? For one, hiring an attorney is one of the major costs of filing for bankruptcy, and with the official 2005 changes and the complicated new laws, the bankruptcy process takes more time for filers and their lawyers, which adds up to more money. In addition, a number of systemic costs were added by the bankruptcy act, including new trustee fees, filing fees, and fees required for credit counseling and debtor education.
The 2005 bankruptcy act means two major things for consumers considering bankruptcy. First, at the outset of the bankruptcy process, a filer will have to pay a few hundred more dollars. Also, filers should be very selective when it comes to choosing their bankruptcy attorney, as it is important they have the specialized knowledge needed to help you through the complex new laws with as little expense as possible.
With higher bankruptcy filing costs and complicated new laws, any TN resident considering filing for bankruptcy should seek the help of a knowledgeable Chattanooga bankruptcy lawyer. At Massey & Associates, P.C., we are committed to aiding those filing for bankruptcy and will help you arrive at a satisfactory resolution in your case. To see how our legal team can help you, call (423) 697-4529 for a free case evaluation.
