Saturday, August 27, 2005

BANKLA Conference, so far

A few items of note so far:

-The proposed interim forms, at least for the means testing, are stil in a state of flux. The ones I reported the link to before are now outdated. As these forms are worked with and developed they are rapidly being changed to try to make them as accurate as possible prior to implimentation. They cannot, no matter how much human effort goes into it, take into account all possible permutations and individual circumstances (they are only forms).

-There is no excuse nor any replacement for reading the code!

-Debtor attorney's, or rather, Debt Relief Agencies, may have to have potential clients sign some sort of consultation contract prior to consulting. This one requires some more investigation, just doesn't seem to make a whole lot of sense.

-Financial Education, required for chapter 7 and 13 debtors to receive their discharge, may also be required for individual chapter 11 clients who's debts are primarily consumer debts.

...more updates to come later

Wednesday, August 24, 2005

Bankruptcy Fees

What fees will be reasonable under the new Act? I have heard fees as high as $5,000 for a chapter 13, and up to $3,000 for a chapter 7. Are these reasonable? I'm not so sure. Chapter 13 cases will change, but not all that substantially, it seems that there are more changes that will require more work in chapter 7's (i.e. reaffirmations, redemptions...). I can understand an extra $500-$600 for a chapter 7, but, $3,000 for a chapter 13, that seems hard to justify. We already have to provide most of the additional information required under the new act in this jurisdiction, so what extra work are we doing? In chapter 13 we will have to provide annual amended schedules I & J, and may be required to provide copies of tax returns. OK, that is not enough to justify thousands of dollars... Where are the extra fees going to come from?

In the end, the market will determine our fees. Sure, you can charge $5,000 for a chapter 13, and have an empty waiting room, or you can be reasonable and charge $2,500 and have a full waiting room, right? One we get over the initial shock of new rules I would guess we will find the equilibrium of the market and come to a reasonable fee range. What are your thoughts?

Impact Statement on Reform Act

I just found a link to a pdf created by the Clerk of the Idaho Bankruptcy Court. This should be on interest not only to debtor attorney's but also to our court and trustee's. It seems to be a comprehensive list of all changes that will need to be made regardless of where one stands in the bankruptcy arena.