RETURN OF BANKRUPTCY
The harsh 2005 Bankruptcy Law initially reduced the number of Bankruptcy filings, but the number of filings are rising because the causes of Bankruptcy have never been addressed. In August, 2006 the Bankruptcy Courts reported an average of about 2300 filings per business day, more than four times the level in November, 2005 after the new Bankruptcy Law went into full effect. Many experts predict that Bankruptcy Filings could reach the number of Bankruptcies before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted.

Under the New Bankruptcy Law, filers must undergo credit counseling before they can file their cases, and agencies state that they can barely keep up the demand from Bankruptcy filers. Credit Counselors are reporting an increase in the number of Debtors seeking Bankruptcy protection because of adjustable rate mortgages being reset at higher rates, higher insurance premiums (in Florida), and other financial difficulties.

Other factors leading to an increase in Bankruptcy filings is the expansion of credit by the lending industry. The amount of outstanding credit card debt has quadrupled since 1990, to $696.7 billion.

There are also a growing number of people who are uninsured or underinsured, filing against medical bills. The Census Bureau reports there are 45 million uninsured Americans, and the number of uninsured among middle income persons has increased 28% since 2001. A Harvard study found medical bills were a factor in half of consumer bankruptcies.

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THE FORECLOSURE PROCESS AND MISPERCEPTIONS

I have filed many Chapter 13 Bankruptcies over the years for Clients seeking to protect their homes from Foreclosures, Probably the greatest misperception about Foreclosure is the 20 day deadline to file an Answer to the Foreclosure. Many people think after 20 days they must evacuate the home. This is not true. In reality, it can take a Mortgage Company two to three months to complete a Foreclosure. The Foreclosure process is as such:

Foreclosure Step One: Case goes to Attorney for action (1 week)
Foreclosure Step Two: Order title search (1 week)
Foreclosure Step Three: Draft complaint (1 week)
Foreclosure Step Four: File Complaint (.5 week)
Foreclosure Step Five: Summons issued (.5 week to 4 weeks)
Foreclosure Step Six: Summons served (3 weeks)
Foreclosure Step Seven: Answer due to be filed (3 weeks) or twenty days
Foreclosure Step Eight: Motion for Summary Judgment Filed (3-6 weeks)
Foreclosure Step Nine: Hearing on Motion for Summary Judgment (4 weeks)
Foreclosure Step Ten: Sale Held (4 weeks)
Foreclosure Step Eleven: Writ of Possession issued (1 day to 1 week)

Even if we do not file an Answer in Foreclosure Step Seven, it still takes about 8-12 weeks to complete a Foreclosure. I recommend filing the Chapter 13 Bankruptcy to stop the Foreclosure, however, at least before Foreclosure Step Nine, because it is best not to delay in protecting your house and because after the Summary Judgment Hearing is held, any fees and costs claimed by the Mortgage Company cannot be reduced. If we file the Chapter 13 Bankruptcy before Foreclosure Step Nine, our Bankruptcy Law Firm can Object to any unreasonable fees and costs claimed by the Mortgage Company and have those fees reduced. This could result in the savings of thousands of dollars.

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