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2006 described as the year of 'bankruptcy holiday'.

Article Excerpt
To date, the changes in the bankruptcy law that went into effect in October 2005 as a result of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) have had a far greater impact than Hurricane Katrina on bankruptcy filings in Mississippi. There was a large spike in bankruptcy filings in the U.S. in October 2005, but filings in 2006 were only about a third of those seen in 2005.

Nationwide, there were about 458,406 consumer bankruptcy filings in 2005 compared to 150,844 in 2006. U.S. Bankruptcy Courts in Mississippi saw a similar spike in filings in October of 2005 followed by big declines in 2006.

"There was a flood of filings before the law changed," said Andy Phillips, a partner with Mitchell, McNutt & Sams, P.A., Oxford, who primarily practices in the area of creditors' rights. "Thereafter, it has dropped off. With the advent of the bankruptcy reform act and its effective date of October 19, 2005, the year of '06 has been described as a 'bankruptcy holiday.' For the Northern District of Mississippi, and for most jurisdictions throughout our nation, filings are significantly down. The requirements to file are stringent and some, including me to a certain extent, would say some requirements are unnecessary and simply don't work in the 'real world'."

Phillips said as debtors' counsel becomes more familiar with the new act, which is occurring, he believes that there will be a gradual and steady increase in filings, but likely not close to the historical yearly...

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