Bankruptcy bill back
The so called bankruptcy "reform" bill passed the Congress April 14, 2005. It will impact only cases filed on or after October 17, 2005. Overview of the new law in practice.
The bill is founded on the belief that a substantial number of those filing bankrutpcy could, if they wanted to, repay their debts. In fact, studies generally show that only about 3% of bankruptcy filers could repay as much as a third of their debt.
Just the week before passage, Harvard Medical School and Law School released the results of a study showing that about half of the bankruptcies in 2001, involving 2 million individual debtors and their children, were caused by medical expenses. More details from the study.
The American Bar Association issued a warning to Congress that provisions of the bill would seriously hamper consumers seeking a fresh start in bankruptcy and interfer with the debtor's right to legal representation. ABA statement.
Thomas Friedman, New York Times columnist has strong views on the importance of bankruptcy to a modern economy.
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