The newest figures just released by the Administrative Office of the U.S. Bankruptcy Courts on the February 2009 bankruptcy filings, created 1 important reality crystal clear to nearly every one, namely, that the rate at which the increasingly overburdened and restive American debtors (both people and businesses) are filing for bankruptcy, is at its highest levels since the now-famous (or infamous, several would say!) draconian adjustments of 2005 to the U.S. bankruptcy law. But, even a lot more considerably, that the new filing rate is ominously beginning to return to the old “hated” high bankruptcy filing levels that the nation had reached before that new law was passed in 2005, supposedly meant to right and drastically curtail or reverse the then pre-existing high filing levels.
This newest trend in American debtor bankruptcy filings strongly underscores a few fundamental points, amongst others. 1st, the depth and gravity of the monetary straights and difficulties in which the average American consumer and debtor is in nowadays. Second, the reality that, no matter how tough a legal hurdle and impediment the institutional powers that be (the Congress, the lawyers, or the monetary institutions, the courts, etc) may try to place on the path of the American debtors to attempt discouraging or making it more tough for them in seeking the bankruptcy relief from their debt burdens, when it truly comes time of dire monetary and economic crunch, Americans will somehow still uncover a way, and will still persevere and persist even against all odds, in demanding their constitutional rights to be heard in bankruptcy and thirdly, the crucial necessity, for the average debtor, for finding low-cost bankruptcy filing alternatives to lawyer.
Elizabeth Warren, a Harvard Law School professor and author of several books on bankruptcy, almost certainly sums up the point greatest this way, alluding to the persuasion of the Congress by various special interests to pass the 2005 law that restricted debtors from filing for bankruptcy: “The credit industry [and other vested interests] did its finest to drive up the price of filing [for bankruptcy]. But when families are in enough trouble, they will fight their way through the paper ticket and greater attorneys’ fees to get support,” adding that “The word is now leaking out [as soon as once more] that the bankruptcy courts are open for enterprise.”
THE “UNOFFICIALLY BANKRUPT DEBTORS” – DEBTORS WHO CAN’T FILE Because THEY CAN’T AFFORD IT
But, even most importantly than that, from the standpoint of the average bankruptcy-seeker nowadays, this raises one fundamental questions, however. Namely, just how do the existing growing army of increasingly despairing American debtors who not only seek to file for personal or business bankruptcy, but in a wonderful deal of cases, really Want to file 1, AFFORD to file bankruptcy – in particular, the high lawyers’ legal price of filing for bankruptcy? How do these debtors get or discover low-cost bankruptcy? A bankruptcy that debtors can reasonably afford?
Some 1.1 million (1,064,000) American debtors filed for bankruptcy this past 2008 year – filings which, a lot of analysts are quick to remind us, were carried out by these debtors in spite of, and under tough conditions of, a whole host of stringent, restrictive requirements and drastically increased legal fees imposed by the 2005 law. But, even much more significant, from the stand point of the debtor or bankruptcy-seeker, is an additional closely related Fact: that, worse still, according to professionals, THERE’S Nearly AS A lot of AMERICAN DEBTORS A lot more who wanted to file for bankruptcy and are eligible, but could not, simply because they merely couldn’t AFFORD the lawyers’ legal fees. These are debtors who Justin Harelik, a bankruptcy lawyer with Cost Law in Los Angeles, call the “unofficially bankrupt debtors” – debtors who are all but bankrupt but only lack the lawyers’ hefty price to make their status official!
YEARLY NUMBER OF BANKRUPTCY FILINGS Considering that 1998
Source: creditslips.org
Year…….Bankruptcy……. Filings……… Source & Notes
1998…….1,442543……….AO data……(Office of U.S. Courts)
1999…….1,319,465………AO data
2000…….1,253.444………A.O information
2001…….1,492-129………AO information
2002…….1,577 ,561……..AO data
2003…….1,589,383………AO data
2004…….1,597,462………AO data
2005…….2,078,415………AO data……..includes spike in filings prior to 2005 bkr. law
2006…….590,544………..AACER information…(Automated Access to Court Records)
2007…….826,665………..AA.CER data
2008…….1,064,000………AACER data
EVEN THE LAWYERS AGREE, THEIR Huge FEES IS A Problem WITH DEBTORS
In deed, although many bankruptcy lawyers would rather that it be shaded, many other lawyers, themselves, objectively acknowledge that the lawyers’ legal fees for bankruptcy is a principal frequent issue and concern to debtors and clients in bankruptcy law practice.
“You have to pay the Chapter 7 legal fees upfront in money. You can be too poor to go bankrupt,” is how Professor Robert M. Lawless of the University of Illinois College of Law when put it.
Another observer, Jenny C. McCune, a contributing editor at Bankrate.com, notes that rather astoundingly, we’ve now come to the point where a debtor may possibly have to “finance bankruptcy filing,” adds: “It may well sound like a Catch-22…you have no money so you’re filing for bankruptcy, but you need [legal fee] funds so you can file for bankruptcy.”
Janathan Ginsburg, bankruptcy attorney, Atlanta, Ga., explains that in phone conversations he usually has with callers facing severe monetary crises who are pondering possible bankruptcy, soon after their initial question which is typically general in nature, “The next question I get has to do with fees: ‘If I have no funds, how am I supposed to pay for a lawyer?’”
Bankruptcy lawyers, schooled in the art of argumentation and the defense of even the clearly indefensible, especially when it centers on the protection of a lucrative indicates of creating a living, would typically plunge into what, in essence, are really deep philosophical arguments in justification of the high fees they charge – it is genuinely still a “bargain” for debtors, contemplating the significantly larger sums they stand to discharge in bankruptcy if a debtor is “really” hard pressed enough by his debt burden and is “serious” about freeing himself of it, he’ll somehow discover a way a debtor, if he is truly “severe,” can always discover the lawyer’s fees somewhere by, say, withholding the payments he would have had to make to other creditors and then employing it to pay the lawyer to no cost him of the bigger debt burden, etc., etc. It is a complicated web of arguments that would have to wait for one more day to address. But, for our present immediate purposes in this write-up, the relevant concern is crystal clear. The point, clearly, is that for the average American debtor nowadays, already reeling from the high debt burden which is the prime object he’s out attempting to address through bankruptcy filing, the average lawyer’s fee for bankruptcy (some ,000 or more for the simplest Chapter 7 bankruptcy, and ,500+ for its Chapter 13 counterpart) is high, in deed even exorbitant, and often is just plain beyond his indicates – in short, merely UNAFFORDABLE.
LAWYERS’ FEES HAVE “PRICED OUT” A LOT OF DEBTORS
Appears that the bankruptcy lawyers, via greed and monopolistic instinct, are gradually pricing themselves out of the personal bankruptcy filing enterprise, that the only realistic option now left to the tried, seems to be a non-lawyer low-cost bankruptcy.
“Surveys have shown that numerous 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,” asserts Stephen Elias, a California attorney and bankruptcy specialist and author of a number of books on the topic. “Since of rules governing the practice of law, the only legal option to attorney representation is self representation… bankruptcy petition preparers can help with your paperwork.”
The point then is crystal clear. The fundamental task at hand this really minute in the field of bankruptcy, is devising a credible program that is low-price for filing bankruptcy, which is simple, straighforwards, and readily accessible, and is, above all, Reasonably priced to most debtors who legitimately seek or need bankruptcy and are qualified and eligible to file under the eligibility rules. It is, soon after all, no “gift” or some sort of “favor” becoming meted out by “the law,” or some sort of mercy-peddling do-gooders of the legal establishment. But, a direct sacred correct and gift of the American Constitution.
It is a job which confronts us all, particularly the bankruptcy constituency and the bankruptcy industry powers-that-be who control the existing bankruptcy system – the monetary and credit business, the courts, the Congress, but which includes private entrepreneurs and suggestions persons who can come up with new or fresh ideas about how to fix the present broken personal bankruptcy system, and yes, the present bankruptcy lawyers and bar, and other people.
But, of more immediacy and urgency in the mean time, nonetheless, although we await such a new program to be developed by the responsible parties, qualified American entrepreneurs, institutions and entities who are able, need to be free of charge to come up with practical and successful methods and techniques – alternatives to the existing wholly deficient and inadequate lawyer-controlled bankruptcy program – that actually enable legitimate bankruptcy seekers to exercise their legitimate constitutional right to seek the bankruptcy relief choice when and if needed – basically, accessibly, and AFFORDABLY. In sum, America, both the public as well as private sector, ought to quick prepare for, devise, and implement, a drastically distinct but efficient bankruptcy filing program that supplies the present million plus per year and the upcoming additional millions of bankruptcy filers who will be coming into the bankruptcy filing pipeline per year, a genuinely cost-effective indicates for them to file for bankruptcy – the 1.4 million American filers (or a lot more) that are expected to seek the bankruptcy relief in 2009 calendar year alone, and beyond.
Benjamin Anosike, Ph.D., has been dubbed by professionals and reviewers of his numerous books, manuals and body of work, which dwell largely on self-assist law problems, as “the man who nearly literally wrote the book on the use of self-assist law methods” by America’s consumers in performing their own routine legal chores – in uncontested divorce, will-generating, easy probate, settlement of a dead person’s estate, straightforward no-asset bankruptcy, etc. A pioneer and intellectual and moral leader of the 1970s-based “you do your own law” movement and a lifelong vehement advocate and veteran of historical battles for the right of the American customers to perform their own tasks in the area of routine legal matters, Anosike was one of the pioneers who fought and survived (along with several others of courage) the lawyers’ and organized bar’s stiff war of the 1970s and ’80s against American customers and entrepreneurs who merely sought, then, to use, write, distribute or sell law-related self-assist books and kits for non-lawyers to do their own law, upon the lawyers’ claim then of such becoming purportedly “unauthorized practice of law” or “practicing law without a license” Anosike holds graduate degrees in labor economics and management and a Ph.D. in jurisprudence. As soon as characterized by a review of the American Library Association’s Booklist Journal as “most likely the most prolific author in the field of legal self-support these days,” Dr Anosike is the author of over 26 books and manuals (and countless number of articles) on numerous topics of American law, such as 4 volumes on personal and enterprise bankruptcy filing, in a lifetime of dedication. For far more on the topic matter discussed in this post, or on how to get a low-cost, inexpensive bankruptcy filing, or the author’s other books and manuals, visit this website: http://www.Afford-Bankruptcy.Com