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What has and has not worked in bankruptcy reform?

On Behalf of | Feb 12, 2018 | Bankruptcy Reform

It has been a while since bankruptcy laws have been reformed. This has provided enough time to analyze how the changes in the laws have worked out. Before filing for bankruptcy in Florida, you may want to look at what has worked and what has not worked with these new bankruptcy laws.

According to American Banker, the last main bankruptcy reform occurred in 2005. The main goal was to reduce the number of bankruptcies being filed and make it easier for people to find alternative options. The good news is the number of bankruptcies has went down, so the law worked in reaching its overall goal.

However, there are also points where the law is not working as intended. One idea was the laws would make filing more affordable for lower-income individuals, but attorney fees have gone up drastically since the reform went through, which means people are not saving money. Another aspect of the reform was to prevent the failure to disclose information. However, it still occurs in about a quarter of all bankruptcy filings.

Despite a couple bad things that have not worked, reform has worked well overall. In addition to lowering the number of bankruptcies, it has also worked in the areas of the means test and the credit counseling requirement. These two aspects have helped ensure people who file are only those who cannot afford to repay debts and has helped create smarter consumers who do not repeat the same bad financial habits. This information is for education and is not legal advice. 


Kingcade & Garcia | A Miami Law Firm