Bankruptcy Filings Soar As New LawBeckons
WASHINGTON - (10/05/05) -- Consumer bankruptcies soared to newhighs last month, at the approach of the effective date of the newbankruptcy law. Personal bankruptcy filings averaged more than9,000 per day during the first two weeks of September, up almost50% from the same period last year, according to a new reportissued by Lundquist Consulting Inc. That's on top of a 14% increasein filings in the six months before, compared to the same sixmonths last year. Officials are attributing the trend to increasedpressure from bankruptcy lawyers urging their clients to beat theOct. 17 effective date for the new law, which will make it muchtougher to fully erase debt through bankruptcy. The new law, foughtfor by credit unions, banks and other consumer lenders, will barindividuals with some financial means to repay from filing to eraseall debt under a Chapter 7, and relegating them instead to aChapter 13 repayment.