Much has been made about the changes under The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Although the law does provide better protection for some retirement accounts, the “consumer protection” portion is largely a misnomer. For the most part, the act was a hand out to big banks and big business passed by Congress during the Bush Administration.
Banks were crying that consumers were abusing bankruptcy laws by racking up credit card bills or other debts and then filing for protection. The argument was that tougher laws would reduce the number of filings. The Denver bankruptcy attorneys at George T. Carlson & Associates note that those same banks, more emboldened and protected from prosecution for abusive and predatory lending practices, went on to cause the Great Recession. The five-year average number of filings in the wake of the recession surpasses anything on record.
Of course there was a rush to file before the law took effect in 2005. The U.S. Bankruptcy Court for the District of Colorado reported a record 43,125 cases that year. But that’s an anomaly. The numbers in 2003 and 2004 were 25,776 and 27,993 respectively. Amid the recession in 2009 and 2010, the numbers were 27,997 and 32,509 despite reforms.
Bankruptcy Reforms Impact on Bankruptcy in Denver
The lesson here is that the banks were responsible for the majority of abuses – not consumers. And the bankruptcy laws today are every bit as powerful a tool when it comes to helping consumers regain control of their financial lives. The proof, after all, is in the record number of filers.
The 2005 bankruptcy reform law:
- Implemented a means test that determines whether a debtor is eligible for Chapter 7 or Chapter 13.
- Utilizes random audits of Chapter 7 filings to test for accuracy.
- Certifies entities to provide required credit counseling and financial education to those seeking bankruptcy.
- Increases oversight of small business Chapter 11 cases.
Those seeking legitimate relief from debt continue to find the U.S. bankruptcy laws to be a powerful tool when properly used on their behalf. Filing for bankruptcy can stop foreclosure and repossession, stop creditors from hassling you, and protect your retirement savings, pension and social security income. Whether filing under Chapter 7 or Chapter 13, consumers are able to win a new lease on life, a fresh start, and a more secure future by seeking bankruptcy protection in Colorado.
Contact a Colorado Bankruptcy Attorney Today
If you need bankruptcy assistance in Denver or would like more information, call George T. Carlson & Associates today at 303-789-1313 for a free consultation or contact us online. We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. Serving clients in Denver and throughout Colorado, including Aurora, Englewood, Lakewood and Boulder.
Denver Bankruptcy Help – 303-789-1313 – Free Consultation
