- November 16, 2015
- Thomas Adam
Bankruptcy Reforms Criticized by Experts
During a panel but on by the American Bankruptcy Institute, the 2005 overhaul of bankruptcy laws was sharply criticized by one of the panelists, an attorney that represents debtors in bankruptcy. The 2005 overhaul was designed to help decrease abuse of the system by debtors and increase the relief unsecured creditors obtained.
The critique was that after ten years, the laws actually seem to have hurt consumers through the increased cost in filing for bankruptcy and the pressure on debtors to propose ambitious plans in order to get the plans improved under Chapter 13. These ambitious plans are sometimes too ambitious and debtors fail to meet them. The negative impacts tend to impact the debtors that most need assistance, low-income debtors. Though there has been an increase in insolvency in recent years, there has been a decrease in the number of bankruptcy filings.
Why it Matters: Lessons learned from the reorganization’s success and failures could be important if a new set of overhauls to the bankruptcy law are instituted. And it seems to be about that time. As discussed in an earlier bankruptcy blog, the American Bankruptcy Institute published a detailed report earlier this year proposing a number of changes to the current US bankruptcy system.
Presidential Candidates Can’t Escape Bankruptcy
The topic of Bankruptcy has been rearing its head in different forms during the presidential race. There has been a lot of recent momentum in favor of making it easier to discharge student loan debt during bankruptcy. Joe Biden has received criticism for his support of the 2005 reforms, some of which increased the difficulty of discharging student loan debt. Hillary Clinton has historically favored making discharge of student loans easier. Donald Trump has received, seemingly never-ending, attention for the four business related bankruptcies he filed.
Why it Matters: In the political world, it often takes attention to garner action. The attention the student loan-bankruptcy issue is receiving puts pressure on candidates and current legislatures to take action and make a change. It is unclear what form that change would take.
Accused of Bankruptcy Fraud
Abby Lee Miller, a dance coach and controversial star of the reality TV show “Dance Moms,” has been indicted for bankruptcy fraud for allegedly concealing over $750,000 in assets and lying about her income when she filed for Chapter 11 bankruptcy. If convicted, she faces jail time and fines in the hundreds of thousands of dollars range.
Miller isn’t the first reality TV star to be accused of bankruptcy fraud. Real Housewives of New Jersey stars, Teresa and Joe Giudice will both be serving jail time as part of a deal reached after pleading guilty to bankruptcy fraud.
Why it Matters: Are you not entertained? Even in the world of law, you have to have a little fun sometimes. Reality TV news is fun. Miller’s story is also a good reminder of the importance of being forthright and honest during bankruptcy proceedings. Trying to “game” the system doesn’t end well. Let your attorneys come up with strategies for maximizing the benefits of bankruptcy that are within the bounds of the law.
Bankruptcy in Jacksonville News
There’s always something going on in the world of bankruptcy and the Jacksonville bankruptcy attorneys at Adam Law Group keep up to date in order to provide you with the most valuable bankruptcy representation possible.