It looks like I'll be talking about bankruptcy reform forever. Ugh. Tom Blumer posted a comment this weekend that people should see, as well as my response.
The nature of the debate was whether it's "Harder" to file bankruptcy under the new law. I say no, Tom says yes. And we're both right.
Tom says it's harder because it's so much more expensive. That's indisputably true. It will be harder to pay for bankruptcy in six months. But I wasn't talking about that; I was talking about whether or not it will be "Harder" to qualify for bankruptcy. I'm not convinced that even 10% of BK filers will have a problem. This was probably my fault for not being clear enough in what I was talking about.
Of course, we're already seeing the beginnings of a bankruptcy boom. Anyone who is even considering filing bankruptcy is being urged to do so now to avoid having to deal with the new law. Most people in the industry expect the bankruptcy courts to be jam-packed for the next six months.
So in October, when the new law takes effect, and bankruptcy filings drop precipitously, the press will cackle "It's because bankruptcy is too hard to get now!" But really, it'll just be the end of the glut, and all the people who need bankruptcy will have filed already. And we won't really know for a while if bankruptcy is proving to be harder to get, because the media will have scared all of the debtors into filing before then.
It may turn out that bankruptcy will be harder to access, not necessarily because of the courts, but because bankruptcy attorneys will have to be selective in choosing clients to represent. And that may stymie a few folks. We'll see this winter.