This excerpt from the Legal Action television show highlights the fact that there are pre-filing requirements that must be satisfied prior to filing for bankruptcy. Long gone are the days where a person could simply fill out some papers from an office supply store, head down to the Clerk of the U.S. Bankruptcy Court and obtain relief from creditors. In fact, the law has become so complex that many attorneys have decided to not practice in the bankruptcy arena anymore. However, there are still plenty of dedicated professionals that have made helping people get out of debt their life’s work. When you come across such an attorney, you will see the passion his eyes. The passage below is just another example of how attorney David M. Siegel helps people who are down, but not out.
Before you file a bankruptcy is there anything that a person – debtor needs to do?
Yes. Things have changed. There are some requirements that one has to go through before there’s eligibility to file. The biggest one is a credit counseling session.
So I’m in the situation I’m in because I didn’t have credit counseling?
The government feels you need to go through credit counseling, because maybe there’s a non-bankruptcy alternative that you might choose.
Suicide?
No, that’ll get you out of debt, but it won’t do good for your heirs or your family.
You want to go through the credit counseling, which is a means to an end. In addition to that you’d have to provide your more recent federal tax return if you are required to file, and if you have paycheck stubs, your most recent two months of those.
You have to submit that to…?
You have to give that to your attorney who’s going to then submit it to the trustee in your case just to verify the information and make sure that you are eligible, and that the information in your bankruptcy petition, which is prepared by your attorney, is accurate and truthful. So they want to cut down on the very little amount of fraud that exists out there for people who really have the ability to repay, but are choosing not to anyway.
Do you have any sense of what the percentage is? Obviously, I was kidding about that before, but it just seems that people are backed up against the wall, and now you want me to jump through this hoop to demonstrate what everybody already knows.
I would say over the course of the year throughout the country that there’s approximately 800,000 or 900,000 bankruptcy cases filed. You may have 100 or 200 total that can be determined to be abusive to the point where they have to dismiss those cases. So it’s very, very small segment, it’s not anything what the credit card lobby back in 2005 said it was. There is not massive abuse going on. Nobody sets out really to file a bankruptcy. People don’t run up debt just to tarnish their credit and file a bankruptcy, and have that trail them around for the next 10 years or in some cases forever. Because it has to be disclosed on certain credit applications, apartment leases, job applications. So, no, there is not widespread fraud, but the government thought that there may have been some fraud. So they passed this legislation back in 2005 to try and curb it, but it really doesn’t exist to any great extent. People need help out there and that’s obvious.
