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Bankruptcy filings up as law set to change
Fredericksburg-area lawyer says local consumers shouldn't panic, since the economy here is strong.
Date published: 10/13/2005 By PORTSIA SMITH By PORTSIA SMITH A black wreath will adorn the locked doors of Boleman Law Firm on Monday. The bankruptcy-law firm will close in mourning for an old bankruptcy law that dies Oct. 17--and to get a break from the past few hectic months, said attorney G. Russell Boleman III. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has kept his firm and other area bankruptcy attorneys running ragged since the law was signed by President George W. Bush in April. Since then, thousands have rushed to file for bankruptcy before the new law goes into effect. Boleman said his Richmond-based firm, the largest law firm in Virginia that specializes in bankruptcy cases, receives about 700 calls a day. Business has recently doubled because people are paranoid about the new law. Boleman Law Firm had an office in Fredericksburg, but had to temporarily relocate it in Richmond, Boleman said. But they will return to the area soon, he said. Bankruptcy attorneys Walter Ragland in Fredericksburg and Earl Oberbauer Jr. in Spotsylvania County were so busy they didn't have time to comment on how busy they've been. The new bankruptcy law will make it harder and more expensive for consumers to file for Chapter 7 bankruptcy, which allows debtors to essentially wipe their slates clean. The federal law says a person must participate in credit counseling within six months of filing for bankruptcy. That counseling could cost up to $50 for a 90-minute session. It also mandates that many debtors complete a financial education course before their bankruptcy cases are finalized. This law is likely to push more debtors into Chapter 13, which requires them to pay creditors within five years instead of the current limit of three years. But according to Boleman, the new law shouldn't scare too many consumers in the Fredericksburg area. "Fredericksburg has a better employment rate and people in the surrounding counties have better job opportunities," Boleman said. "I don't think Fredericksburg is being dramatically affected because there is a good work force and Fredericksburg has a good economy." And the numbers prove it. According to the United States Bankruptcy Court for the Eastern District of Virginia, Chapter 7 filings have increased, but not dramatically.
Date published: 10/13/2005
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