- The Washington Times - Friday, October 14, 2005

Washington-area residents rushed to file for bankruptcy yesterday before a new federal law setting stricter standards takes effect Monday.

Chuck Miller, who oversees the Alexandria Bankruptcy Court’s clerk’s office, called the recent turnout “phenomenal.”

“It’s amazing to see three clerks handling six or seven customers at a time when we normally have just one clerk out there handling maybe a handful of walk-ins on a given day,” said Mr. Miller, divisional manager for the Alexandria division court.

The new law, the most sweeping reform of the U.S. Bankruptcy Code in decades, sets new limits on personal bankruptcy filing and requires people to get professional credit counseling before they can file.

It also establishes a “means test,” which will allow courts to examine the finances of debtors to determine the most appropriate chapter of the bankruptcy code for their filing.

Only if their income for the previous six months falls under the state median would they be eligible to liquidate all their debts under Chapter 7.

The clerk’s office in Alexandria is receiving about 90 percent of its bankruptcy applications over the Internet, with the rest of applicants coming in at the last minute yesterday to file at the courthouse.

The public could file their claims at the courthouse until 4 p.m. yesterday, but lawyers can file bankruptcy claims online until 11:59 p.m. tomorrow .

Mr. Miller said in the last few weeks he has assigned every employee he can to the “staggering” number of bankruptcy cases that are being filed. Those cases reached a high Thursday, topping 336 cases in one day. About 975 cases have been filed this month, more than twice the 483 cases the clerk’s office received for the entire month of August.

“I normally have seven people handling these cases but now I have 14,” Mr. Miller said at his office yesterday morning, adding that some have been staying late to process the cases. Employees in cubicles next door were busily reviewing hundreds of cases pouring in from lawyers, who generally have filed them online.

John Brooks of District Heights was one of about 15 people lined up outside the Maryland Bankruptcy Court in Greenbelt yesterday morning.

“I knew when the president signed the new law … that it was going to be harder to take creditors off,” he said. “We knew it was the best time [to file], we just waited until the last minute.”

A Capital Heights woman who did not want her name used said she, too, rushed to get her paperwork to the court before the deadline.

“I was trying to decide if this was my last option. I don’t think this is going be available to me after Monday,” she said of her Chapter 7 filing, which eliminates filers’ debts.

A Silver Spring man whose wife filed for Chapter 7 yesterday said she wanted the help of an attorney to do her bankruptcy filing but had to do it herself.

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