2013 marks a turning point for many with debt problems. On October 17, 2013 eight years will have elapsed since the BAPCPA bankruptcy law revisions went into effect. One of the significant provisions of that law was changing the period between chapter 7 case filings from 6 to 8 years.
Many who filed their case during the rush to file in October 2005 anticipated that they would be able to come to the well again after 6 years like they always had before. They were dismayed to find out that congress decided they could only pass this way every 8 years.
When they rush to file bankruptcy again (some are coming in already) they will find that it is no longer the neat, clean, inexpensive relief they remember. Before BAPCPA I charged a standard and affordable flat fee of $700. Court costs were $149. I split everything into 3 easy payments, with the final payment due at the meeting of creditors.
Bankruptcy is now a major undertaking. Filing fees have more than doubled to $306 for a chapter 7. I can’t even begin to tell you how much the attorney fees will be until we meet and I can get a feel for the complexity of your financial issues. Now there is due diligence, and everything must be documented in the file. On top of it all, when I file your petition, it includes your pay stubs for the immediate past 60 days. The trustee is to be provided you most recent tax return by law, plus whatever additional papers he may want. Don’t forget the pre-petition credit counseling and the post-petition financial management courses you have to take. Payments? Yes, but now you have to be paid in full before I file your bankruptcy petition.
Before 2005 my normal bankruptcy file consisted of a petition, a questionnaire, and your credit report. Now a typical file consists of scores (that’s multiples of 20) of separate documents. There is now so much paper that your file is scanned and the documents are kept in digital format. I return the originals to you as soon as I can.
If you are lucky and your file is well documented your case only may involve only one court appearance. If not, the US Trustee might object and claim your discharge would be abusive to your creditors. If he does, you can stand and fight, or you can convert your case to chapter 13. If you fight and lose, you are barred from ever discharging the scheduled debts again.
All this boils down to tons more work for your lawyer and more attorney fees for you. When you come in for your next bankruptcy and find out how much it costs, don’t protest that you paid less than a thousand dollars last time. Those days are gone forever. Welcome to BAPCPA bankruptcy sticker shock.