How Will The Presidential Election Affect Bankruptcy

In 2005, Congress passed sweeping changes to the federal Bankruptcy Code that placed heavy burdens and restrictions on debtors needing bankruptcy relief. The purpose of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCBA) was to make it more difficult for debtors to file a Chapter 7 Bankruptcy. Under Chapter 7 many debts are discharged. The BAPCBA forced debtors into Chapter 13 Bankruptcy, a three to five year debt repayment plan. To achieve this goal, BAPCBA took a great deal of discretionary authority away from bankruptcy judges.

During the Presidential Election in 2008, President Obama proposed to reform the federal bankruptcy laws and give bankruptcy court judges greater authority to fashion a just and reasonable resolution to debtors’ financial difficulties. One example of this was the ability to modify the first mortgage or deed of trust on a family’s home. This was (and continues to be) a means many economists support to saving the housing crisis. However, Obama’s initiative did not have bi-partisan support and the legislation died in Congress.

Now, four years later, neither political party seems concerned with bankruptcy reform. This appears an intention omission given the constant debate over the GM bailout, and the over 4,500 bankruptcy cases filed each and every business day. While the candidates posture about the economy and jobs creation, neither the 2012 Repulican Platform nor the Democratic Platform addressed those families bankrupt from upside-down mortgages, crushing credit card debt, or un-payable student loans.

In our great nation, We The People get to decide between candidates and elect our national and local leaders. Unfortunately, neither major political party has taken a position on bankruptcy reform and appears continent with the status quo. What does that mean for American debtors needing bankruptcy relief? It means that the local bankruptcy judges have less control; that the unintended consequences resulting from an ill-conceived and poorly written piece of legislation will continue; and that our bankruptcy appellate courts remain busy with trying to apply a bad law to difficult cases. It means more federal dollars are wasted trying to protect big banks and credit card companies. In the end, neither the creditors nor the debtors benefit from this law.

If you need bankruptcy relief, discuss your case with an experienced bankruptcy attorney. You and your attorney can work within the federal bankruptcy laws to obtain your relief. Your attorney knows where the “soft spots” are located in the current bankruptcy code and how to guide your case for maximum benefit. Get a free consultation today and learn how the law can work for you.

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