NACBA Has Harsh Words for Senate Bankruptcy Hearing
The National Association of Consumer Bankruptcy Attorneys (NACBA) issued a press release yesterday calling the Republican witness line-up for the last minute hearings on the 2005 Bankruptcy reforms "the financial world equivalent of the Flat Earth Society."
NACBA President Henry Sommer went on to say that "No credible person in the field seriously disputs the fact that the bankruptcy law changes have been a spectacular flop."
NACBA rightly points out that the financial services industry lobbied hard on the idea that bankruptcy abuses were costing the average American money, and that our cost of doing business would decline with the reforms. Just two weeks ago, Steve Bartlett, President of Financial Services Roundtable, was quoted as saying the reforms were good for consumers, creditors, and the national economy. Where, NACBA wants to know, are those declining fees and interest rates?
If there's anyone on the witness slate with even lower credibility than Bartlett, it must surely be Todd Zywicki, the law professor at George Mason University School of Law who suggested that the bankruptcy law was perfectly drafted. Overlooking for the moment the three successful Constitutional challenges to the law thus far, NACBA points out a few minor flaws in the way this perfectly drafted statute has played out:
1. A NACBA study of credit counseling agencies serving clients during the first few months after the law took effect indicated that credit counseling agencies had found 97% of pre-bankruptcy clients to be unable to repay any debts.
2. More than 75% of consumer bankruptcy attorneys indicated that the time involving in preparing a bankruptcy petition had increased by 50% or more.
3. The U.S. Bankruptcy Court for the Northern District of New York reluctantly concluded that creditors be priorized over tithing in bankruptcy. Leading sponsors of the reform were quick to say they'd never intended that outcome, and legislation was quickly drafted to correct it...but that legislation has not been enacted.
Full NACBA Press Release
NACBA President Henry Sommer went on to say that "No credible person in the field seriously disputs the fact that the bankruptcy law changes have been a spectacular flop."
NACBA rightly points out that the financial services industry lobbied hard on the idea that bankruptcy abuses were costing the average American money, and that our cost of doing business would decline with the reforms. Just two weeks ago, Steve Bartlett, President of Financial Services Roundtable, was quoted as saying the reforms were good for consumers, creditors, and the national economy. Where, NACBA wants to know, are those declining fees and interest rates?
If there's anyone on the witness slate with even lower credibility than Bartlett, it must surely be Todd Zywicki, the law professor at George Mason University School of Law who suggested that the bankruptcy law was perfectly drafted. Overlooking for the moment the three successful Constitutional challenges to the law thus far, NACBA points out a few minor flaws in the way this perfectly drafted statute has played out:
1. A NACBA study of credit counseling agencies serving clients during the first few months after the law took effect indicated that credit counseling agencies had found 97% of pre-bankruptcy clients to be unable to repay any debts.
2. More than 75% of consumer bankruptcy attorneys indicated that the time involving in preparing a bankruptcy petition had increased by 50% or more.
3. The U.S. Bankruptcy Court for the Northern District of New York reluctantly concluded that creditors be priorized over tithing in bankruptcy. Leading sponsors of the reform were quick to say they'd never intended that outcome, and legislation was quickly drafted to correct it...but that legislation has not been enacted.
Full NACBA Press Release
