When Congress overhauled the bankruptcy laws about 10 years ago, the goal was to provide a higher percentage of repayment of at least a portion of some debts, crack down on abusive filings, and to reduce the overall number of consumers seeking the protection of bankruptcy. An elaborate mathematical computation was put in place that dictates what type of bankruptcy a person is allowed to file, and other changes as to exemptions and the amount that must be repaid for certain pieces of collateral (like cars) was changed. The result of the new law was confusion. Too many Courts were unclear on how to apply the new rules, and as a result there has been abundant litigation regarding several key bankruptcy issues. But, perhaps the most interesting thing is in figuring out if the changes had an impact on the volume of filings.
While in the year immediately after reform the number of cases decreased, the same cannot be said of the years following:
● Just five short years ago, the number of filings was up by over 1/3.
- California leads the pack with the number of filings, at close to 60,000 in a single quarter!
- In just the middle district of Florida, the number of filings in the first five months of 2015 topped 10,000.
These numbers show reform had an impact on the number of filings, but only initially. As more issues are decided, and the rules made clearer, more people are considering bankruptcy as an option. Of the number of cases filed, nearly 100% of them are by individuals and families. The latest information is that 98% of filings fall in this category, and of those 65% of them are the more desirable Chapter 7. The bottom line is that when the economy is sluggish, people will use bankruptcy as a way to manage overwhelming debt. We have a handle on all the changes, and even evolving local rules and procedures and can help you take charge of your financial future. Call us today to find out more about bankruptcy as a solution to burdensome debt.
If you have questions about bankruptcy, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.