Debt Management Expert Voices Opposition To New Law: “New Bankruptcy Law Hurts Rather Than Helps”

President Bush has signed into law a measure that will deter tens of thousands from filing bankruptcy under Chapter 7 bankruptcy.

According to Kenneth Priore, an attorney in California and a principal in a professional debt negotiation company, New Leaf Debt Settlement, “This law goes too far, instead of punishing a few bad actors, it is a direct slap in the faces of thousands of average wage earning Americans. This means test hurts doesn’t catch just the bad apples but hard working wage earners.” Debtors will now be required to seek credit counseling before they can take advantage of bankruptcy protections. The law also requires full financial disclosure and authorizes a bankruptcy trustee to decide what expenses are reasonable and allowable for debtors post bankruptcy. A debtor who makes more than the state medians will be forced into a 5 year repayment plan at a minimum of $100/month.

According to Priore, “How can you punish people having financial hardships yet do little to curb high-interest and aggressive lending practices. Twenty Five years ago, the credit card rates that we today take for granted would be illegal.” Mr Priore further noted that this law is essentially designed to protect creditors at the expense of consumers, thousands of which have a legitimate need for Chapter 7, including, but not limited to, single mothers, recently unemployed and those burdened with expensive illnesses.

The law, which President Bush eagerly signed, will take effect 180 days after the signing, and will have a profound effect on many of the 1,6M Americans who have filed for bankruptcy this year. Most debtors who now qualify to file under Chapter 7 will in the future be required to file under Chapter 13 and work out a plan to repay their creditors.

Before founding New Leaf Debt Settlement, Priore was a managing attorney for a third party litigation group for Charles Schwab, Inc. and counsel and chief compliance office to MVC Capital. Priore received his BA from Tufts University in 1991 and his JD from Tulane University in 1995.

People who are concerned about the bankruptcy law may read the law’s contents at www.newleafdebt.com