The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed in order to prevent abusive bankruptcies from occurring, but most bankruptcy lawyers are worried that the act does more to harm their low income clients. The new law actually seems to do more harm than good when it comes to lower income filers.

The Filing Process Gets Harder

In short, the BAPCPA increases the requirements for a person to file for bankruptcy. This means that more paperwork and filing conditions are required, leading to higher attorney fees and filing costs. This makes it extremely hard for Hawaii’s lower income residents, who are already facing the financial worry of bankruptcy, to afford a Hawaii bankruptcy lawyer. It seems that the act, which was intended to prevent unnecessary filings, has also worked to make the bankruptcy process harder for poorer people.

Do-It-Yourself Risks

Because the fees and costs for filing for Hawaii bankruptcy have increased under the BAPCPA, many people are attempting to save money by filing for bankruptcy on their own. This is really a double-edged sword because the new law also means stricter filing requirements. The consequences of making a mistake in the filing or submitting process are now much more serious and understanding the rules can be extremely difficult. Before the law went into effect correcting innocent mistakes in the bankruptcy process was a lot easier. This means that more people face the likelihood of having their bankruptcy case thrown out, which could have devastating effects.

The new law also makes it more difficult for a filer to determine how they sit in the means test, which is what determines if the person can file for Chapter 7 or Chapter 13. As bankruptcy can affect anyone regardless of their income level, the new law can definitely spell trouble for the future of Hawaii’s bankruptcy filers. More information about the new law can be found by visiting: 1330 Ala Moana Boulevard #202, Honolulu, HI 96814 or by calling (808) 554-0104. ‎

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