Bankruptcy Fraud
Bankruptcy Reform Pitfalls

According to the American Bankruptcy Institute, about 1.6 million individuals filed for bankruptcy during the year that ended in June 2004.

While that was about the same number as in the previous year, it increased 150 percent since 1989.

A recent Harvard study revealed that a major contributing factor is medically uninsured people faced with sudden medical expenses they cannot afford to pay.

During the past several years, Congress, with heavy support from the banking and credit card industry, considered legislation that would make it near impossible for consumers to file a Chapter 7 bankruptcy, a form of bankruptcy where debtors get to walk away from debts and creditors get little, if any, repayments. Until recently, such legislation stalled each time it was introduced.

The Senate and House passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In April 2005, President Bush signed it into law, which means it will take affect in October 2005.

The bill does not address the rampant crimes committed by bankruptcy trustees against debtors, nor, does it close the loophole in the law that allows the wealthy to put their assets in trusts so they don't lose anything in bankruptcy while the average working person loses everything.

Bankruptcy Stats:

 

According to BankruptcyAction.com:

• Couples with kids are twice as likely to file.
• Single moms are three times as likely to file.
• Over half of filers experience serious medical problem.
• Two of three filers have lost a job.

 

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