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WASHINGTON-The Consumer Federation of America and the National Association of Consumer Bankruptcy Attorneys called the new bankruptcy law scheduled to go into effect Oct. 17 a “cruel second blow” to Hurricane Katrina victims. “The harsh new provisions.should be delayed for at least one year,” NACBA Director Brad Botes, a principal at Bond and Botes, said. CFA and NACBA are requesting that the effective date of the new bankruptcy law be delayed for Hurricane Katrina victims and documentation requirements be reduced. He argued that we should “avoid kicking Hurricane victims who are already down,” which he said the new law would do. The credit union trade associations lobbied long and hard for the controversial legislation, which aims to stem abuse of the bankruptcy system by putting additional checks in place for Chapter 7 filings, and are not ready to give up that easily. “Generally, we think the law has provisions to cover many, if not most, instances that may occur in this disaster,” CUNA Vice President of Communications and Media Outreach Pat Keefe said. NAFCU Director of Legislative Affairs Brad Thaler added, “The new law does not target that person.” The bankruptcy amendments go after those abusing the system, not someone trying to obtain relief because they lost everything in the hurricane. Specifically, CFA and NACBA are calling on Congress to permanently waive for Hurricane Katrina and other natural disaster victims: * the six-month income documentation, * the means test expense guidelines, * credit counseling requirements, * lifting the automatic stay for landlords, and * eliminate other paperwork requirements and strict deadlines. “This is the minimum relief Congress should provide,” Botes emphasized. CFA Legislative Director Travis Plunkett added that the “special circumstances” provisions in the law take too long to provide relief and are very narrow and costly. Legislation has been introduced to help those already in the process to postpone certain requirements. CFA is a non-profit consumer advocacy association of 300 organizations that often works with credit unions, but has sparred with them on the bankruptcy reform issue. NACBA has 3,000 members nationwide and is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. [email protected]

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