Waiver of Credit Counseling Requirement in Hurricane Area

[HHM]

The U.S. Trustee Program today announced a temporary waiver of the statutory requirements for credit counseling for bankruptcy filers in Louisiana and the Southern District of Mississippi due to the effects of Hurricane Katrina, according to a news release this afternoon. The new bankruptcy law permits U.S. Trustees to waive the credit counseling requirement within a judicial district where approved credit counseling agencies are not reasonably able to provide adequate services to bankruptcy filers. The U.S. Trustee for Region 5 made this determination with respect to the Eastern, Middle and Western Districts of Louisiana, and the Southern District of Mississippi. The U.S. Trustee program does not have jurisdiction over the state of Alabama, another state affected by the disaster.

[Minnymouth]

I think this a much needed "gesture" on the part of the Us Trustee Program....
These victims (most who will have file bk) have lost it all......homes, belongings, jobs, etc.......right down to the clothes on their backs.
Most would never have to file BK - so for them to attend credit counseling would be like adding insult to injuries.....
I also feel that if they do file BK - then most should be granted and not be contested by creditors.
These people need a "clean slate" to start their lives over again - they don't need creditors banging on their doors during this time of "struggle in their lives"......
Just my thoughts,

Minny

[HHM]

Yeah, its a nice gesture...but the problem is not so much with creditors objecting, but with BK and the hurricane is that the new BK code requires the production of many documents that many of these people no longer have...and the new code provides no obvious mechanism for waiving these requirements and mandates dismissal for a debtors non-compliance.

The other problem is the new way a debtors income is calculated. The code mandates that a debtors income shall be the average of the last six months worth of income. So in essence, if you become unemployed, you would have to wait for 6 months, and e unemployed for all six months, to be able to declare you have zero income. Again, the code does not provide and obvious mechanism for waiving this requirement.

[Minnymouth]

I hadn't really "thought" about these people loosing all their PAPER WORK!!! Your absolutely right, this addresses none of that. They don't have "proof" of anything to give the court system..... thus resulting in dismissal of their cases....
Even with them "waivering the counseling" many will not qualify due to lack of paperwork. HOW SAD IT THAT???
The income thing is a problem also, one day they were working, next day they aren't......
Yeah, they need to go back and look at this situation all over again...........special circumstances for major disastor victims......

Minny

[hhou812hh]

Yeah, its a nice gesture...but the problem is not so much with creditors objecting, but with BK and the hurricane is that the new BK code requires the production of many documents that many of these people no longer have...and the new code provides no obvious mechanism for waiving these requirements and mandates dismissal for a debtors non-compliance.

The other problem is the new way a debtors income is calculated. The code mandates that a debtors income shall be the average of the last six months worth of income. So in essence, if you become unemployed, you would have to wait for 6 months, and e unemployed for all six months, to be able to declare you have zero income. Again, the code does not provide and obvious mechanism for waiving this requirement.

The six months of income rule I feel is the one part of the new law that while it will curb abuse it will really hurt those in dire need for relief. However, it's actually averaged out so if someone normally earns 5k a month and is unemployed for 4 months the earned income will have a much smaller average and put that person under their states median income which will grant them a ch7.

It's the other documents that will be a nightmare to recover.