WASHINGTON, Oct. 14 – LAWFUEL – The Law News Network – The following is a statement by Edward L. Yingling, president and CEO, ABA:
“All of us agree that our nation’s bankruptcy system should be both fair
and sympathetic — and this new law strikes just the right balance. The law
closes several abusive loopholes and creates a system that matches debtors’
financial needs with the appropriate level of bankruptcy protection.
The most important thing to remember is this: The courthouse doors will
remain open for all bankruptcy filers. Those who have low incomes or a serious
medical condition that has derailed their finances will be given a fresh
financial start. Higher-income debtors will receive significant bankruptcy
protection, but they’ll also be asked to repay some of what they owe. All
filers will have the added benefit of having credit counseling before they
file for bankruptcy — free of charge for those who can’t afford it.
“A recent consumer survey shows that 94 percent of Americans agree that
high-income bankruptcy filers should be asked to repay what they can afford.
Perhaps that’s because most people know of an abusive case involving a wealthy
celebrity, business tycoon or even a neighbor that caused them to question the
system’s integrity. With this new law, wealthy filers will no longer be able
to use the system as a financial planning tool. The ability to escape debts —
such as monetary judgments in a civil court case — by socking away millions
in a Florida mansion will be limited. And serial filers will be limited to one
filing per eight years instead of one every six years.
“Recently, we saw the new law’s flexibility demonstrated when the Justice
Department announced leniency for Gulf Coast hurricane victims. This action
showed that the legislation can bend and adjust to different situations —
just as Congress intended.
“We are confident that the bill’s flexibility and balance will be
demonstrated more and more as the law is applied. Americans facing financial
hardship will find that the new bankruptcy system is open for business and
ready to help them get back on their feet.”
For background information on the new law, visit ABA’s press room,
http://www.aba.com/Press+Room/default.htm
Web Site: http://www.aba.com
