Cheap, Affordable Bankruptcy Without Lawyers – Beat the New Higher Bankruptcy Costs and Save on Fees

Higher Bankrupt Costs Since the New Law, So How Can Debtors Get Cheap Affordable Bankruptcy Without Lawyers?

WHY THE NEW BANKRUPTCY LAW WAS ENACTED

On the 18th of October in 2005, the brand newly-enacted bankruptcy legislation, known as”the “Bankruptcy Abuse Prevention and Consumer Prevention Act of 2005” (BAPCPA) was put into force within the United States. At the time there was no expectation that an increase in cost of bankruptcy would be a be the result of this new legislation. But, new reports indicate that the new law has brought these results and there are now more American consumers filing bankruptcy without legal counsel bankruptcy of individuals Russia.

The new law was initiated primarily by the public protests and outcry, and lobbying of the wealthy organized, well-organized, and connected, yet powerful, American credit card and banking companies as well as the bankruptcy lawyers who been arguing that the prior bankruptcy law was “too soft on debtors,” and that the “excessive generosity” of the old bankruptcy system had allegedly encouraged abuse and permitted many indeserving debtors, who, they claimed might have had the money to pay their debts to gain unfair advantage by applying for Chapter 7 bankruptcy to avoid having to pay their debts.

The claim was not in any way accurate. In reality, virtually every reliable study was conducted on the subject and the majority of experts who were present in Congress were of a different opinion. Yet, Congress disregarded such evidence. Instead, it swiftly came to the rescue with the BAPCPA law, in any way.

Therefore the stated, yet evident purpose of this law was to discourage people from having to file bankruptcy, by making the process more difficult and costly to declare bankruptcy. The new law sought to accomplish this by requiring people who, as it was claimed would be able to “afford” (through a determination through a complicated “means test” calculation) to pay off a portion of their debts into filing bankruptcy with Chapter 13, instead of using Chapter 7 – that is the kind that bankruptcy (Chapter 13) which stipulates that the debtor be able to pay back at least a portion at least the majority, if not all in their debts.

HAS THE NEW LAW ATTAINED ITS ORIGINAL OBJECTIVE?

And, oh my! this is about five years after the enactment of the bankruptcy laws of today. The real results and consequences that the legislation has brought are only beginning to be revealed. It is a matter of have the BAPCPA law achieved the primary goal for which it had was originally developed?

Actually, on the main objective of the law – the purpose of deterring people from filing bankruptcy and significantly reducing the number of bankruptcy filings filed by debtors it appears that the BAPCPA law has, so far, proved to be an utter ineffectiveness. In actual fact at the moment there is a record-setting rise in BANKRUPTCY FILING. In the 12-month period that ended on 30 June 2010 bankruptcy filings increased by 20%, according to data published from the Administrative Office of the U.S. Courts. The total number of filings for bankruptcy were made during that time, as against 1,306,315 bankruptcy cases which were filed in the prior 12 months that ended July 30, 2009, which makes it the largest amount of bankruptcy filings in any time in the time since BAPCPA law was implemented in the month of October in 2005.

How the New Law Has Made Bankruptcy More Cumbersome and Costly for Debtors

However, it is on the other major impact of the law that its effect has grown much more severe for the typical debtor or bankruptcy filing. This is due to the reality that the law has made bankruptcy more complicated for those who have to file and has also increased the cost of bankruptcy and has led to debtors seeking low-cost bankruptcy with no an attorney.

In the past, the capacity of a typical debtor to apply for bankruptcy and be able to reasonably relieve themselves of their debt burden, as well as to get a fresh start to live a new life without a burden from previous debts, has been an essential, but also long-standing feature of American legal system and the way of life. In actual fact, that right is among several fundamental rights explicitly outlined in the founding U.S. Constitution and guaranteed by the Constitution. But, in contrast to this essential American value the bankruptcy laws of the year 2005 bring to the bankruptcy process, perhaps in the very first instance certain elements that drastically restrict the use and enjoyment of that fundamental right for the average debtor. It accomplishes this by putting many new obstacles that are both financial and legal, on the road of the burdened American debtor seeking to obtain the “fresh start” protection that bankruptcy has historically provided to the American debtor.

A Few Examples of How The New Law Has Done this. The new law:

It is now more difficult for debtors to pay off certain kinds of debt.* Requires a larger percentage of debtors to pay their debts.
* Requires special responsibility and restrictions that aren’t commonplace for bankruptcy lawyers and bankruptcy Paper Preparers (e.g. lawyers must personally verify the authenticity of the debt and financial information that their clients supply them with and also to prepare more formal paperwork ) giving lawyers an excuse to increase their bankruptcy fees more than they did before.
* Places enormous restrictions and unjustified scrutiny on individuals who work as Bankruptcy Paper Preparers (the term used in the Bankruptcy Code for non-lawyers who assist debtors in filing bankruptcy filing) and the result of which is to hinder the need for affordable help for bankruptcy filers, and force them to legal offices for bankruptcy attorneys who cost more than 50 times the cost that the BPPS to do exactly the same thing on behalf of the debtor.
The law requires debtors to go through counseling on their budget and credit and
Submit bankruptcy filers to an avalanche of paperwork, documents and procedures that can be a bit overwhelming for anyone, to file bankruptcy.

Exorbitant Legal Fees for bankruptcy filers is the largest
Consequence of the New Law

Now, some five years after the implementation under the newly-enacted BAPCPA law, it’s pretty clear that the most significant consequence of this new array of obstacles created from the new legislation regarding the American debtor is an increase in the cost of bankruptcy with the new law as well as excessive lawyer’s fee for bankruptcy filers. And this has caused debtors to look for a low-cost bankruptcy, without a legal counsel.

Bankrupt Cost Higher

According to the study published in January 2010 , by Katherine Porter, associate professor of law at the University of Iowa, and her coworker, Ronald Mann, a professor of law at Columbia University, titled “Save on Bankruptcy fees,” (primarily due to the fact that the cost of attorney costs and court filing costs have been increasing so rapidly in the wake of the law change) many debtors in the present times find it to costly to file bankruptcy. For instance, the typical cost for lawyers’ fees for filing a bankruptcy, even in the simplest some areas of the country has been reported to be reduced to $2,500 for a straightforward Chapter 7 bankruptcy, and approximately $4,500 for the Chapter 13, among other new issues that are now faced by a person seeking to file bankruptcy.

But Don’t Despair. There are Still Some Available Low-cost, Affordable Options for Debtors to File Bankruptcy!

It is true that for many debtors, this new legislation has led to increasing costs for bankruptcy. If you’re an individual who is looking to file for bankruptcy what can you do to overcome this issue? This could mean that, for instance, how can you obtain a low-cost inexpensive bankruptcy without the need for legal counsel? One answer appears to be that American consumer and debtors alike have become more proficient in coming up with an “new” alternative for getting their bankruptcy filing requirements completed easily and cheaply.

One of the most legitimate options and an excellent option for those who are in debt in the U.S. Bankruptcy law, and is growing “popular” among them as the method of filing bankruptcy is the use by the debtors of cheap, low-cost, non-lawyer assistance to help bankruptcy petitioners with their bankruptcy papers. They are referred to as Bankruptcy Paper Preparers or BPP under legislation governing bankruptcy, the assisters are usually skilled paralegals. The most skilled that are chosen, are educated and skilled experts in bankruptcy typically the exact legal professionals that bankruptcy lawyers use within their offices when performing bankruptcy work for their clients who are in debt.

Stephen Elias, an California lawyer and bankruptcy specialist, and the author of numerous publications on bankruptcy, summarised up the facts and trends as follows: “Surveys have shown that many attorneys have doubled their fees to cope with new requirements imposed by the BAPCPA of 2005. Many thousands of debtors have therefore been priced out of lawyer representation in their bankruptcies.”

Therefore, says Elias: “Because of rules governing the practice of law, the only legal alternative to attorney representation is self representation… Bankruptcy Petition Preparers can assist with your paperwork.”