In October 2005, after several years of debate in Congress, the consumer provisions of the Bankruptcy Code went through significant modifications in the enactment of the Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA). At that time, consumers rushed to obtain bankruptcy relief before the new and more restrictive provisions of the revised Bankruptcy Code became effective. As a result, the number of filed bankruptcy cases dropped significantly. More recently, the number of Bankruptcy filings has steadily increased on a nearly monthly basis and the prediction by the Administrative Office of the U.S. Courts is that the filings will return to the pre-reform levels of 1.5 million filings per year nationwide.
Traditionally, an overextension or abuse of credit, divorce, uninsured health problems or the loss or interruption of employment have been the most likely reason for a consumer bankruptcy filing. In addition, financial difficulties are affected by increasing utility costs, food and gas prices and other increases in the cost of living. Now, in addition to some of the more traditional life-altering events, and the sharp increases in spending for necessities, many Maryland consumers are finding themselves in precarious economic times related to their home ownership.
Our community is watching real estate values decline as interest rates climb, lending criteria change, and the sub-prime mortgage market is suffering. Many consumers have experienced and will continue to experience significant upward adjustments in the amounts of their mortgage payments. Added to other day-to-day increases in consumer expenses, the current real estate mortgage climate is putting a strain on their ability to maintain their home ownership.
The lawyers who comprise the membership of the Consumer Bankruptcy Section of the MSBA attorneys representing both debtors and creditors are poised and ready to apply their training and skill to assist these members of our community. The members of the consumer bar were ready to implement the bankruptcy law changes and have endeavored to expand their working relationship with the Court to address new issues as they come to the fore. The Bar has been very active in the process the Court has used to implement the local rule changes which has served to benefit the practitioners and the Court.
As the Chair of the MSBA Consumer Bankruptcy Section, I urge all consumer practitioners, whether working on behalf of debtors or creditors, to join our Section and make their voice heard. The Consumer Bankruptcy Section has served as a respected voice in our Court’s application of the new statute and the implementation of our new rules and procedures. Through our award-winning “Pro Se Debtor Video”, excellent MICPEL educational programs, useful webpage and active and informative Email List, consumer practitioners have shared ideas and strategies and have excelled in the representation of clients dealing with the implementation of the new provisions of the bankruptcy laws.
Non-bankruptcy lawyers who work with clients that are dealing with these bankruptcy-related issues should get to know bankruptcy lawyers and have those lawyers on their speed-dials. Contrary to the rumors that have persisted since the enactment of BAPCPA, bankruptcy is not dead and it may be the answer for clients who are experiencing all manner of financial or financial-related problems. Bankruptcy can provide a strategy, if not a solution, for lawyers who counsel clients in, landlord/tenant, business, civil litigation and family law matters, just to name a few.
As the pressures increase on consumers, the lawyers who are trained to represent petitioners and their creditors stand ready to use the law to help their clients. As a member of the MSBA, you can join the Consumer Bankruptcy Section for only $15. Visit www.msba.org and sign up today.
Michael G. Wolff, Esquire, is Chair of the MSBA Consumer Bankruptcy Section.