Thresholds to Filing in Chapter 7 – Means Testing and The Liability of Lawyers
By Janet Flaccus · October 14, 2005 · 2005 Ark. L. Notes
In categories: Archive
As you now have heard, Congress finally passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. They had been threatening to pass similar bills since the end of the 1990s. I last spoke about these proposed bills in 1999 at a continuing legal education site. This article will discuss two basic changes the Act makes when Chapter 7 is filed for a client. Most of the provisions of the statutory change come into effect on October 17, 2005.
Let me discuss the accuracy of the petition and the debtor’s discussion of debts and assets in his schedules. The Act has penalties that can be imposed on the attorney representing the debtor, the debtor and the creditors. Secondly I will discuss the threshold requirements for the filing in Chapter 7. Here too, the Act has sanctions that can be imposed on the debtor’s attorney for improper calculation that resulted in the chapter 7 petition being dismissed or converted. One good thing is that the liability of attorneys in the Act is less than the liability in previous versions of this legislation.