Why is bankruptcy so complicated and expensive?

People in need of bankruptcy often find it difficult to get the money together to pay a bankruptcy lawyer. The President of the National Association of Consumer Bankruptcy Attorneys said, referring to the "new" 2005 bankruptcy laws, "We've imposed enormous costs on the system which, among other things, have been a real barrier to people filing for bankruptcy because it's so expensive". The Wall Street Journal reported that higher attorney fees are due to the heavier load of legal work that is necessary to meet the law’s requirements, creating a large hurdle for financially strapped people.

What's going on here? Is this just plain unfair? Were the 2005 bankruptcy laws simply a huge mistake? (more…)

Will they take my house if I file bankruptcy? (Part 3)

In this Part 3 of the series "Will they take my house if I file bankruptcy?", the situation is that you're behind on your house mortgage payments, afraid they'll foreclose on your house, and probably in debt for other things. In this situation the question is better expressed as "Can I save my house by filing bankruptcy?". As with many questions about bankruptcy, the direct answer is a strong "it depends".