Bankruptcy is a scary thought for some, but a reality for many. Right now, Bryan attorney Pat Stacy says there's a boom in bankruptcies.
"The last couple of weeks I have three or four calls a day saying can you take my bankruptcy case," said Pat Stacy, Attorney, Bryan, Stacy & Dillard.
In 2004, more than 93,000 people filed for bankruptcy in Texas alone. This past September, personal bankruptcy filings jumped to the highest on record.
The reason is new bankruptcy laws.
Traditionally, bankruptcy's "clean slate" so to speak has been available to almost everybody. But the laws are changing. People are rushing to get their debts cleared before October 17, that's when the big changes go into effect.
Among the most notable are new limitations on filing for personal bankruptcy, chapter 7.
"You have to qualify to even think about filing for chapter 7 and you have to be below state of Texas median income," said Stacy.
The rush is on, the legislation passed in April and is biggest reform in US bankruptcy law in a generation. If you want to file bankruptcy after October 17, you will need federally approved credit counseling first.
"We can't file any type of bankruptcy without to an approved debt counselor. Those approved will be put on a list," said Stacy.
Right now, Stacy is so busy he's not taking on any more bankruptcy clients and he says you'd be hard pressed to find someone who is. Soon, Stacy says the new law might even force some lawyers out of the business.
"The law is requiring us to verify more information which puts a lot of liability on the attorney. There's going to be a lot of attorney's that don't do anything but chapter 7 and they're going to say, hey its not working," said Stacy.
Supporters of the new law say it's a fair way to crackdown on those who rack up credit-card debts recklessly, only to shed them in Chapter 7. Opponents say it will unfairly trap people who become buried in debt. Either way, the law is the law and filing for bankruptcy will now be a much more difficult process.