Bankruptcy Filings Predicted to Rebound

The new bankruptcy law that generally went into effect on October 17, 2005 caused a feverish rush to file.

The period immediately after October 17th was drastically slow for consumer bankruptcy professionals throughout the United States. Bradford W. Botes, Executive Director for NACBA (National Association of Consumer Bankruptcy Attorneys) states that he is “confident that the rate of filings will pick back up during the first quarter of 2006.” He sites the increase in credit card minimum payments, increased fuel costs and ever increasing interest rates as factors which will increase the rate of future filings.

Botes further states that “three things have lead to the recent decrease in filings:

1. Virtually everyone who was considering bankruptcy filed prior to October 17, 2005;
2. The last two months of the year are always somewhat slow;
3. Many people think that bankruptcy is no longer an option.”

David Siegel, Chicago bankruptcy attorney and American Bankruptcy Institute member, is doubtful that the rebound will occur as quickly as predicted by Botes and others. “I simply have not seen nor felt the normal interest in bankruptcy for this time of the year, specifically, with regard to filing Chapter 7 bankruptcy. The need to save homes through Chapter 13 bankruptcy has remained somewhat constant, however.” (Special Reports are available at http://www.bankruptcylawyerschicago.com)

In the near future, NACBA will commence a media awareness campaign to get the word out that bankruptcy is still an option for those caught in the clutches of debt. That media campaign along with a steady stream of television advertisement espousing bankruptcy should have some impact.