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Could we see a shift to No Money Down Chapter 7 bankruptcy cases?

There is some talk that the bankruptcy code should allow debtor’s attorneys to file chapter 7 cases for no money down.  A recent Bloomberg Article discusses this

By Daniel Gill

A push to ease big up-front costs of Chapter 7 bankruptcy is gaining attention as proponents seek to change bankruptcy law to help the worse off financially avoid a more painful restructuring.

The American Bankruptcy Institute’s Commission on Consumer Bankruptcy has been asked to help with the effort to find a way for attorneys to file Chapter 7 cases without being paid all their fees up front, as is now the practice. Only Congress can change the Bankruptcy Code.

The issue is important for debt-ridden consumers who’d benefit more from Chapter 7, but who can’t afford a lump sum advance payment. These debtors often are forced into Chapter 13, a longer and more expensive process with less assurance of good results.

Read more at Bloomberg BNA 

About Author

Terrance Leeders

Chicago Bankruptcy Lawyer, husband, father, Cubs fan.

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