Bankruptcy News

Congress Should Give Katrina Victims Finanical Relief By Delaying Severe New Bankruptcy Law

Burdensome Paperwork Rules, Other “Gotcha!” Requirements Not Practical for Wiped-Out Hurricane Victims; New Law Would Make Victims’ Already Bad Situations Even Worse.

WASHINGTON, D.C. September 8, 2005 Harsh new provisions under federal bankruptcy law set to go into effect in mid-October should be delayed for at least one year for people whose lives, finances or business were directly impacted by Hurricane Katrina, according to the Consumer Federation of America (CFA) and the National Association of Consumer Bankruptcy Attorneys (NACBA). CFA and NACBA warned that, in the absence of the enactment of such emergency relief by Congress, thousands victims of Hurricane Katrina could face a cruel second blow when they try to take steps to put their lives and finances back together.

The two groups urged that the delayed implementation cover those who already were in financial trouble and planned to file before the new law became effective on October 17, 2005, and those who have been driven into bankruptcy because of Katrina and need time to regroup and get their records together. These natural disaster victims already have been devastated and should be allowed to file under the more flexible current law, according to the two groups. CFA Legislative Director Travis Plunkett said: “Bankruptcy is an important safety net that families hit by unforeseen circumstances depend upon.

The federal government should be bending over backwards to help Katrina’s victims get back on their feet, not throwing up new barriers to bankruptcy. The new law's harshest provisions that impose the biggest hurdles to bankruptcy should be permanently waived for victims of Hurricane Katrina. ”

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	Did You Know?
	Chapter thirteen is common for individuals with regular income Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time. You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.