BAPCPA PART 1: MANADATORY DISCLOSURES IN BANKRUPTCY

AS PART OF THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005, attorneys have to provide information to clients at the beginning of representation.  These disclosures are parts of the bankruptcy code.  The first Notice in the disclosures, explains the different types of bankruptcy, Chapters 7, 11, 12 and 13.  It also explains a new requirement of the BAPCPA, credit counseling.  Credit counseling is mandatory on BAPCPA and did not exist as a requirement prior to 2005.  Arguably, the most important information provided in the first notice, is what bankruptcy can and cannot do for the person filing. 

The second notice informs potential filers that the information they provide must be truthful and that that they will be subject to means testing.  Means testing at its simplest, is an income qualification for chapter 7 bankruptcy.  If a person does not qualify for chapter 7 because of the means test, he/she must file a chapter 13 reorganization.

Notice number three  provides that an individual or business providing bankruptcy services, must provide you with a contract outlining the services provided and the cost for such services.

The final notice explains the consequences of providing fraudulent information or concealing information from the bankruptcy court. 

My biggest issue with the disclosures, is that my clients, for the most part, don't read them.  We provide the disclosures in every case.  However, we can't force our client to actually read them.  They expect me to provide this information and I do, making these disclosure wholly unnecessary.