Reply #63: Bankruptcy fees could skyrocket

[UpInArms]

The reform bill before the House on Thursday may also make it more difficult to find legal help.

http://money.cnn.com/2005/04/12/pf/bankruptcy_fees/?cnn=yes

NEW YORK (CNN/Money) – Those who are least able to pay their bills are likely to see a price hike in the coming months if they file for bankruptcy.

And, many predict, they'll be less likely to find a lawyer willing to help them.

The House on Thursday is expected to debate and pass a bankruptcy reform bill. The Senate has already passed its version, and House approval would virtually guarantee that the bill becomes law.

Under the new law, bankruptcy attorneys would be liable for any misleading statements or inaccuracies in a client's case. As a result, attorneys say, they'll have to invest far more time and effort – in some cases hiring accountants and other experts – to verify all the information clients give them, down to examining receipts.

In a cost-estimate report, the Congressional Budget Office said that complying with the provisions of the bill is likely to increase attorney costs by $150 to $500. "Some of those additional costs," the report noted, "would most likely be passed onto their clients."

That may be a modest assessment.

...more...