Personal Injury Law

Unfortunately, many of our personal injury clients and Social Security disability claimants suffer serious financial difficulties because of the length of time between suffering their injuries or disabilities and receiving settlements or benefits. As a result, some of our clients are forced to file for bankruptcy.

In an effort to better serve our clients, our law firm recently opened a Bankruptcy and Consumer Protection department, run by attorney Kathleen Munden. Ms. Munden has more than a dozen years of experience representing consumers in bankruptcy cases and consumer protection claims.

Now, due to the economic downturn, even people who have not been injured or disabled are also having to file bankruptcy. A recent article from the MSNBC Web site details the large increase in bankruptcy filings over the past year. Here are excerpts from the article:

The number of U.S. businesses and individuals declaring bankruptcy is rising with a vengeance amid the recession, despite a three-year-old federal law that made it much tougher for Americans to escape their debts, an Associated Press analysis found.

Nearly 1.2 million debtors filed for bankruptcy in the past 12 months, according to federal court records collected and analyzed by the AP. Last month, 130,831 sought bankruptcy protection ? an increase of 46 percent over March 2008 and 81 percent over the same month in 2007.

Bob Lawless, a professor at the University of Illinois College of Law, said bankruptcies could reach 1.5 million this year and level off at 1.6 million next year ? around the same time economists expect an economic recovery to begin.

Congress voted in 2005 to make bankruptcy more cumbersome after years of intense lobbying from the nation's lenders, who complained that people were abusing the system. Before the move to change the law, bankruptcies were running at what was then an all-time high of about 1.6 million per year.

The tighter requirements initially appeared to work, with bankruptcies plummeting from a record-shattering 2 million cases in 2005 ? a total that reflected a rush to file before the new law took effect ? to 600,000 in 2006. But now bankruptcies are booming again.

The bankruptcy rate is climbing as well. In the past 12 months, about four people or businesses for every 1,000 people in the country filed for bankruptcy, according to the AP analysis. That is twice the rate in 2006, and close to the average of about five for every 1,000 in the decade leading up to the change in the law.

Many filers take a credit counseling class just a day before turning to the courts.

Also, the law's test of a person's ability to pay off debts appears to have failed at one of its goals: steering debtors from Chapter 7, which allows people to sell off their assets to repay what they can and start again debt-free, and into Chapter 13, which places the filer in a repayment plan that can last for years. Chapter 7 cases accounted for 69 percent of all filings in the past year, compared with 71 percent in 2004.