This North Barrington bankruptcy lawyer believes that Congress failed to realize that people who are filing bankruptcy did not have the ability to repay their debt. It wasn’t that people were fraudulently filing bankruptcy or filing bankruptcy when they didn’t have to file; people were filing bankruptcy because they needed to file. People were falling behind on their bills, they were being sued, they were being garnished, they were being harassed by creditors; people were opting to get relief under the bankruptcy code because they needed the relief. In fact, the credit card industry put a lot of people into the bankruptcy by lending them money that they could not repay and then raising the interest rate and the late fee and the over-the-limit fees to the point where they could not pay.
So if the credit card lobby really wanted to cut down on the number of bankruptcies being filed they would have to cut down on the over-lending that they were doing for people who don’t have the ability to repay.
In any event the credit card lobby got the bankruptcy law passed and these additional requirements kicked in.
Another problem with the credit counseling session is that people are not seeking credit counseling on their own. It is the bankruptcy attorneys that are referring their clients to the credit counseling company because it’s mandated under the bankruptcy code that it must be done. Thus, if someone comes to see me seeking to file Chapter 7 bankruptcy, I tell them they must go to credit counseling first. They are simply going to go to credit counseling, get their certificate as a means to an end to be able to file.
I have not had a client, since the law changed, tell me that they went to credit counseling and they no longer desire to file a bankruptcy, they’re going to go a different direction. In fact the exact opposite is true. I’ve had clients that go to me for bankruptcy and I send them directly to credit counseling and they take the credit counseling simply to file the bankruptcy.
When creditors are calling at all hours of the day and lawsuits are arriving by way of special process server, the thought of repaying the debt is not realistic. The real thought is how I can extract myself from all of this debt. For those people, bankruptcy is salvation. The bankruptcy process makes it possible.