Bankruptcy Laws Help People in Crisis

* In “It May Be Now or Never if You Want to File Personal Bankruptcy” [Money Talk, June 9], regarding the bankruptcy reform legislation, supporters of that bill believe that increased advertising by attorneys is one of the reasons for the increase in bankruptcy filings or that attorneys persuade people to file bankruptcy.

In my law practice, the majority of filings here are by those without attorneys, so it would seem there must be factors other than lawyer advertising and attorneys persuading people to file causing the increase in bankruptcy filings.

Attorneys are bound by ethics. My job is to advise people of their options and the advantages, disadvantages and ramifications so that they make an informed decision. The claim is that people file bankruptcy because they are unwilling to cut back their lavish lifestyle. I have never seen this.

People file because of a catastrophic illness, divorce, bad business debts or unemployment. It is not a decision made lightly or with joy. I have seen grown men weep and families torn apart over this decision.

Before Congress restricts the ability of people to file bankruptcy, they should look to the intent of our Founding Fathers who included in the Constitution a person’s right to get a fresh start by filing bankruptcy.

PATRICIA A. FOX

Santa Barbara

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* If bankruptcy laws were correctly balanced, any time would be right. The fact is that current law favors the debtor. Now that the pendulum is swinging back to center, your article is misrepresenting that debtors will be unduly restricted. Not so.

The current move is to make those with “means” repay their debts through a Chapter 13 instead of a dismissal through a Chapter 7. Your article also does not point out the real losers in bankruptcy . . . all of us.

Creditors do not benignly take losses. They pass the loss on in the form of higher interest rates and prices. Also, there has been tightening by most creditors in the qualifications for unsecured debt. You’re seeing a booming economy now, and debt is easy to obtain. When the economy slows down, things will be much different.

GREGG STOCKDALE

San Dimas

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* I read the L.A. Times article on legislation Congress is working on to make it harder for people to file for bankruptcy. The bankruptcy laws should not be changed at all, since they provide a relief valve for people who find themselves caught in a financial nightmare.

While I am sure there are plenty of stories of people who have neglected the laws for their own benefit, I know there are many more who just get caught in circumstances that would be insurmountable without the laws.

These people are against the wall and file only because they cannot meet the payments due to loss of work or overextending themselves or because they are in business and either lost a few accounts or their clients did not pay.

It is simplistic and incorrect to state that all these people are deadbeats who are taking advantage of the system at everyone else’s expense.

RODRIGO T. GARCIA

Monterey Park