Requirements Eased for Hurricane Victims

Following Hurricanes Katrina and Rita, the United States Trustee's office announced special enforcement guidelines for debtors affected by natural disasters. These guidelines are an effort to lessen the impact of the new law on filers who may be displaced from their homes and personal papers. Among other things, these guidelines make the following changes for victims of natural disasters who file for bankruptcy: Credit counseling will not be required. Debtors who cannot provide required documents due to a natural disaster will not face enforcement actions. Trustees are to consider the income loss, increased expenses, and other effects of a natural disaster as "special circumstances" that may allow a debtor who doesn't otherwise pass the means test to qualify for Chapter 7. Trustees will provide alternate means for debtors to attend creditors' meetings, if necessary. For more on these rules, go to the website of the United States Trustee, www.usdoj.gov/ust, and click "Enforcement Guidelines for Debtors Affected by Natural Disasters."

Lawyers May Be Harder to Find -- and More Expensive

As you can see, the new law adds some complicated requirements to the field of bankruptcy. This is going to make it more expensive -- and time-consuming -- for lawyers to represent clients in bankruptcy cases, which means attorney fees are going to go up.

The new law also imposes some additional requirements on lawyers, chief among them that the lawyer must personally vouch for the accuracy of all of the information their clients provide them. This means attorneys will have to spend even more time on bankruptcy cases, and charge their clients accordingly. Some experts predict that this combination of new requirements may drive some bankruptcy lawyers out of the field altogether.