Much has been written about the 2005 changes to the United States bankruptcy laws, very little of it being positive – at least from the perspective of the struggling families who find themselves seeking counsel with a Clark and Washington attorney discussing bankruptcy options.

One trend we have noted has to do with the unforgiving nature of many of the requirements now set forth in the law.  For example, the credit counseling and financial management education requirements of the law are generally seen as a waste of time, but bankruptcy judges from around the country have dismissed cases when debtors do not follow the law’s requirements exactly.

For example one of our Tennessee bankruptcy judges dismissed a Chapter 13 case because the debtor obtained credit counseling the same day as he filed his bankruptcy case.  According to the judge, the law requires that you obtain credit counseling at least one day prior to actually filing so a same day counseling and filing does not meet the requirement.

Imagine the heartbreak of a debtor who was not aware of this interpreatation of the law and loses a house or a car because his bankruptcy filing was deemed invalid.

We recently came across another example of a very harsh interpretation of the rules contained in the bankruptcy law.  The law requires that debtor file with the court copies of pay advices for the 60 days prior to the date of filing.  A New York judge recently dismissed a case where a debtor filed all but one of his pay stubs.  The debtor’s pay was exactly the same for each pay period but he was not able to find one of his pay stubs.  The judge wrote that he had no discretion under the law to accept anything less than complete compliance.  “While dismissal of this case may seem to be a harsh result, it is one that is mandated by the statute”.

If you get the sense that filing bankruptcy without experienced counsel can be difficult, you are correct.