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From: Warren Reports

New Data on the Hurricane-Bankruptcy Connection

By Elizabeth Warren - September 7, 2005, 7:37AM

Common sense says that bankruptcy filings rise when families are wiped out after a hurricane. And the data back it up. Peter Gosselin at the L.A. Times gives the first report of a data analysis put together by Professor Robert Lawless at University of Nevada Las Vegas. I'll write more on this after my class this morning, but take a preliminary look for now.

The data are staggering: the growth in bankruptcy filings is about 50% higher in states hit by hurricanes and about 34% higher in nearby states.

But Gosselin has done more: He's interviewed a bankruptcy judge, a Republican former-staffer and bankruptcy practitioner, and the chairman of the National Bankruptcy Review Commission to see what they think will happen when the Katrina victims turn to bankruptcy. Their conclusion is unanimous: they will have a much harder time getting back on their feet if the new bankruptcy law has been implemented. The only dissenter? A credit industry lobbyist who, once again, says the bill is just fine.

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The people who will be hurt by the bankruptcy laws aren't the ones we saw starving and dying in downtown NO, because they had so little to begin with. Hopefuilly they will get direct assistance. The ones who will be hurt are the ones who got out in their SUVs. They are the middle class, they are Bush's base. Will this make any difference to them?

Posted by Mimikatz
September 7, 2005 10:07 AM | Reply | Permalink

My feeling is that survivors need to be told to file now for bankrupcy before the new law takes effect. Don't wait to see how things pan out. File now. Word on this needs to be posted everywhere.
dc

Posted by davcbr
September 7, 2005 10:55 AM | Reply | Permalink

Correct me, someone, on this, but isn't it a provision of the new law that bankruptcy attorneys are personally (criminally?) liable for the accuracy of their clients' petitions.

If so, folks better file quickly. With the likely condition of clients' records after the hurricane, how many attorneys are going to be willing to file petitions under the new law with that liability hanging over their heads?

Posted by Ellen
September 7, 2005 5:16 PM | Reply | Permalink

The WSJ ($) reports today that:

Despite Republican objections, Democrats in Congress want to give Katrina victims a one-year reprieve from the new bankruptcy law that goes into effect Oct. 17. Consumer groups and bankruptcy attorneys say the new law's increased paperwork requirements and additional costs will further hurt hurricane victims who may be forced to seek bankruptcy protection.

Posted by Colore Oscuro
September 7, 2005 8:36 PM | Reply | Permalink

Correct me if I'm wrong, but doesn't that imply that the new filing requirements injure the filer? This law is about kicking people when their down, because there may have been a hint of fraud under the old law. The attitude seems to be, "Don't take risks or make financial mistakes. They are unforgivable, even if they are a result of events beyond your control - you should have been prepared." This is true to an extent, but it is being taken too far. If Republican opponents to the reprieve object to the reprieve, they are being heartless to victims of natural disasters. God help them if they ever stumble. If they go along, they admit the law causes injury to the filer, which makes it wrong.

You think maybe the law is a bit harsh, and ill concieved?

Posted by Jim Anderson
September 8, 2005 2:28 PM | Reply | Permalink

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