Contact: John Hartgen
(703) 739-0800
color='#0000ff'>jhartgen@abiworld.org
ABI ENDOWMENT
TO FUND STUDY TO SEE WHETHER BAPCPA HAS SUSBSTANIALLY INCREASED CONSUMER
BANKRUPTCY FILING COSTS
size='3'>May 29, 2009, Alexandria, Va. —
The American Bankruptcy Institute Endowment Fund has awarded an initial
$82,500 grant to Professor
size='3'>Lois R. Lupica, the Maine Law
Foundation Professor at the University of Maine School of Law, to
examine whether the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (BAPCPA) has substantially increased the costs of accessing
the bankruptcy system for consumer debtors and their creditors. Many
experts and advocates have expressed concern that BAPCPA has
significantly raised costs for consumer debtors and their creditors
since its enactment in October 2005 because of the additional fees and
conditions that must be met for a consumer to file and receive a
discharge from bankruptcy.
BAPCPA mandated that consumers
looking to file for bankruptcy must first enroll in credit counseling
from an approved counselor 180 days prior to filing. Once the credit
counseling requirement is met, consumers must pay a filing fee of $299
for a chapter 7 case and $274 for a chapter 13 case, in addition to any
lawyer’s fees. Some courts also impose an additional
administrative fee. Once a debtor has filed for bankruptcy, he or she
must also pay for a financial-management course prior to receiving a
discharge. The court may waive the filing fee in a chapter 7 case if a
debtor’s income is below specified levels and the court finds that
the debtor cannot pay the filing fee in installments. As job-loss
numbers and consumer bankruptcy filings continue to increase in the
current economic downturn, BAPCPA’s opponents are continuing to
raise arguments that the 2005 bankruptcy law changes made consumer
bankruptcy more expensive, more time-intensive and less effective for
the consumers who use it.
Prof. Lupica, a former ABI
Resident Scholar, will conduct a pilot study of select districts to see
whether data from consumer bankruptcy case files show that BAPCPA made
the costs of consumer bankruptcy substantially more expensive. Data will
be collected with respect to distributions to creditor classes, trustee
fees, debtor’s counsel fees and other costs and expenses (such as
credit counseling, filing fee and post-filing financial management), and
will take into account local rules and orders of the sample districts.
The results of the pilot study will be released at ABI’s 2009
Winter Leadership Conference, Dec. 3-5 in La Quinta, Calif. Prof. Lupica
will then engage in a full-scale national study on consumer bankruptcy
expenses in early 2010, with a targeted completion date of Winter
2011.
The ABI Endowment Fund was
created in 1989 to provide a secure financial base for the Institute and
to provide resources for insolvency research and education. Projects
eligible for Endowment funding include research by individuals or
entities relating to bankruptcy or insolvency; surveys or other
analytical investigation; the education of judges, court personnel,
other governmental personnel and the general public; scholarships or
other educational grants; support for the Robert M. Zinman Resident
Scholar; and support for both the Chief Judge Conrad B. Duberstein
National Bankruptcy Memorial Moot Court Competition and ABI’s
Corporate Restructuring Competition. Since 1998, the Fund has awarded
over $900,000 in grants and scholarships.
###
ABI is the largest multi-disciplinary, nonpartisan
organization dedicated to research and education on matters related to
insolvency. ABI was founded in 1982 to provide Congress and the public
with unbiased analysis of bankruptcy issues. The ABI membership includes
nearly 12,000 attorneys, accountants, bankers, judges, professors,
lenders, turnaround specialists and other bankruptcy professionals,
providing a forum for the exchange of ideas and information. For
additional information on ABI, visit www.abiworld.org. For additional
conference information, visit
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>http://www.abiworld.org/conferences.html.