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The Future of Bankruptcy Law in the Aftermath of the BAPCA

Two years ago today, the Bankruptcy Abuse and Protection Act of 2005 was signed into law and took effect in October 2005. The Act implemented several significant changes to existing bankruptcy law, such as making it more difficult for individuals to file for Chapter 7 bankruptcy and imposing more onerous due diligence requirements on debtors' attorneys. Because of its anti-consumer slant and added burdens on attorneys, many consumer groups and lawyers vigorously opposed the BAPCA.

But has all the doom and gloom that was predicted come to pass? Bankruptcy law guru Catherine Vance provides an extensive analysis of the post-BAPCA world in this blog post, HAPPY BIRTHDAY, BAPCA!, up at the Bankruptcy Litigation Blog. Citing a survey by the Commercial Law League's Bankruptcy Section, Vance reports that consumer attorneys' practices have shifted as a result of BAPCA. She writes:

Almost 47 percent said that they had increased what they charge clients, and the follow up question that asks for details on pre- and post-BAPCPA fees shows that the increases are primarily confined to consumer debtors’ attorneys.  No surprises here; no one really expected that consumer debtors’ attorneys would keep their rates the same once BAPCPA took effect.  A third of the respondents said they had changed their client mix as a result of BAPCPA.  Again, a review of the comments some respondents provided shows that this is largely a consumer practice phenomenon.  For some, the shift had to do with the proportion of chapter 13 cases relative to chapter 7 cases, so, for these practitioners, the shift wasn’t away from consumer work.  Others, however, stated that their firms had affirmatively determined that they would do no more consumer debtor work, and some cut out all debtor representation, including those debtors would proceed under the new chapter 11 provisions for individuals. BAPCPA has had an effect on pro bono representation as well.  A third of respondents said that pro bono representation had ceased because of BAPCPA, and nearly 13 percent said the amount of pro bono work they do has decreased.   In a related question, 28 percent of respondents said they had noticed an increase in pro se filings.

Vance also notes that some creditors' lawyers are pulling out of reaffirmation work because of the BAPCA amendments. 

At the same time, in spite of BAPCA or perhaps because of it, some solos regard this as a great time to be a bankruptcy lawyer because (a) there's always a base need for bankruptcy attorneys, no matter the economy, and (b) with lawyers leaving bankruptcy law, there's more opportunity for those who enter this practice area. And as this Business Week article points out, new technology tools and datebases have emerged to help lawyers deal with BAPCA's additional requirements and keep up with the latest developments. 

Posted by Carolyn Elefant on April 20, 2007 at 06:24 PM | Permalink | Comments (1)


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