Aug. 23, 2005 – With less that two months before the implementation of more restrictive bankruptcy laws, consumers have been filing for debt protection at ever-faster rates, according to evaluations of United States court data.
Using records compiled by data company LexusNexus, the New York Times reported Sunday that bankruptcy filings for the quarter ending in June were 12 percent higher than the same time last year. The spike continues a trend in increased bankruptcy filings by individuals that analysts have attributed to the impending change in the law slated for October 17.
As previously reported by The NewStandard, the bankruptcy reform legislation, signed into law in April, sparked complaints from many consumer advocates who worry that people are losing a legal safety net and protection from predatory lending companies. Under the new rules, relief-seeking debtors could easily end up under restrictive, court-supervised payment plans.
According to a June statement by the American Bankruptcy Institute, a non-partisan bankruptcy information clearinghouse, the first three months of 2005 saw a 7.9 percent rise in bankruptcy filings. The organization predicted consumers will continue to seek bankruptcy relief at elevated levels throughout the summer and early fall.
