Many people are too poor to file for bankruptcy and they should be allowed to pay attorneys and filing fees over time instead of paying in full up front, according to a report released by the American Bankruptcy Institute.
The ABI’s Consumer Commission last week released its report that analyzed the consumer bankruptcy filing process and made recommendations about how it can be reformed.
The report, which runs 274 pages, looks at the entire bankruptcy filing process and took more than two years to complete.
To make it more efficient and less expensive for individuals to file for bankruptcy, the panel made a number of recommendations, including:
- Developing software to make filing bankruptcy forms easier, lowering the amount that attorneys would need to charge to fill out the forms themselves
- Make more pro bono lawyers available for bankruptcy cases
- Expand the number of individuals who would be eligible to have the filing fee waived. Currently, only individuals who live within 150% of the poverty line are eligible to have their fees waived.
- Allow meetings to be held remotely using video technology
- Have Congress provide counsel for low-income bankruptcy filers, similar to how public defenders are made available in the criminal justice system
The report also recommended allowing individuals to have their student loan debts discharged through bankruptcy and offer bias training to address potential racial disparity issues in bankruptcy filings.