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Consumer Groups Call for Katrina Victims to Get Relief from New Bankruptcy Law |
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September 9, 2005
The two groups urged that the delayed implementation cover those who already were in financial trouble and planned to file before the new law became effective on October 17, 2005, and those who have been driven into bankruptcy because of Katrina and need time to regroup and get their records together. These natural disaster victims already have been devastated and should be allowed to file under the more flexible current law, according to the two groups. "Bankruptcy is an important safety net that families hit by unforeseen circumstances depend upon. The federal government should be bending over backwards to help Katrina's victims get back on their feet, not throwing up new barriers to bankruptcy," said CFA Legislative Director Travis Plunkett. "The new law's harshest provisions that impose the biggest hurdles to bankruptcy should be permanently waived for victims of Hurricane Katrina." Brad Botes is a member of the NACBA board of directors and a principal in Bond & Botes, a law firm with offices in Mississippi, Alabama, Florida and Tennessee, including one office blown away by Katrina. Botes said, "What we really need to do here is avoid kicking hurricane victims when they already are down. Unfortunately, the new bankruptcy law deliberately removes the flexibility and 'give' in the old system that made it possible for attorneys and judges to work with people in disaster situations and find a way to meet their often quite dire needs.' “If Katrina victims are socked with the new bankruptcy law, they will find their already difficult circumstances made even worse by a rigid system that will force bankruptcy judges to, in effect, ignore the plight of thousands of individuals devastated by one of the worst disaster in U.S. history," Botes added. CFA and NACBA urged Congress to permanently waive the following provisions for Hurricane Katrina victims:
“While the economic effects of Katrina in the immediate disaster area are obvious to all, the damage to our nation's economy is just beginning to be understood. As Katrina has illustrated in the most vivid manner, many American families face the very real prospect of being pushed over the financial edge by an unexpected event, such as a natural disaster, serious illness or a job layoff," he added. Report Your Experience
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