Filing bankruptcy has its burdens according to a Tinley Park bankruptcy attorney. One such burden is in regards to paycheck stubs and tax returns. This information has to be tendered to the Chapter 7 or the Chapter 13 trustee at least seven days prior to the 341 meeting of creditors. Chapter 7 bankruptcy trustees are still making the statutory rate of $60 per case that they have been making for as long as I can remember. The trustees really do not want the additional burden without the additional increase in compensation to review tax returns and pay check stubs. In fact, the Bankruptcy Code mandates that these items have to be filed with the court. Local rules, however, have turned that into a situation where they just need to be provided to the trustee by your bankruptcy lawyer.
Some trustees under Chapter 7 ask that the tax return and the paycheck stubs be brought to the 341 meeting of creditors. In those situations, the trustee basically glances at the information and then returns it back to the debtor or the debtor’s attorney. What point is it to provide the tax return and the paycheck stub if the Chapter 7 trustee is feeling overburdened by even looking at them that they don’t even look at them in advance and they only glance at them for a second at the meeting?
Additionally, the US Trustees Office in the Northern District of Illinois used to require that the pay advice is sent directly to the trustee’s office for review. This was oversight on the US Trustees Office because they knew the panel trustees under Chapter 7 were not doing a very good job at looking at the information. Those are simply the bankruptcy facts.
So these burdens under the new law are just that; they are burdens. They are not necessarily helping people repay their debt with non-bankruptcy remedies but the legislation was bought and paid for by the credit card industry primarily and it took over 12 years for them to get a Pres. and a Congress to pass the law. Remember, bankruptcy is still around. People can still get relief under the Bankruptcy Code. They just have to go through a different process to get the right to file. Bankruptcy attorneys are still there to assist people who need to either reorganize their debt under Chapter 13 or get a fresh start under Chapter 7.
To cut down on the amount of people who were filing bankruptcy, it’s not going to be a change in the bankruptcy law. Cutting down on the number of people filing for bankruptcy is going to be a decrease in the amount of credit that is lent out without any indication of whether or not a person can repay the debt. Just think of how many credit card applications you’ve gotten in the mail over the years telling you that you are preapproved. Just think of how many offers you have received in the mail or heard on the radio or heard on the TV from other credit card companies enticing you to pick up their card. Think of all the benefits they provide, whether it be mileage or points or dollars or rewards. Think about all the enticement that is out there for credit cards towards individuals. If you want to cut down on the bankruptcy filings, you need to stop the lending that’s going to people who do not really have the ability to repay it. If you curtain the lending, you can curtail the amount of people who want to file bankruptcy.