Bankruptcy Filings are Up in 2006, LexisNexis Reports
The rate of personal bankruptcy filings is on the rise at the start of this
year after a falloff in late 2005 following changes in federal bankruptcy law,
reports LexisNexis. Data compiled by LexisNexis’ CourtLink system found 4,243
Chapter 7 bankruptcies filed across the country from Jan. 1 to Jan. 13, 2006
and 5,922 Chapter 13 filings in the same period.
Filings of Chapter 7 petitions fell 91 percent in October and 87 percent in
December compared with the rush of filings seen before the new bankruptcy law
provisions went into effective October 17. Filings in the second half of
October fell 99.2 percent compared with the first 16 days of that month. The
new bankruptcy law requires counseling before filing for bankruptcy. That is
proving difficult for some. “People who don’t speak English are finding it
particularly difficult to obtain the credit counseling briefing that is
required,” says Henry Sommer, co-editor-in-chief of Collier on Bankruptcy, a
LexisNexis publication. “We don’t see this issue being resolved any time soon.”
Another problem is that consumers are not being told that credit counseling
fess can be waived if they can’t afford them, Sommer says.
