Washington – The Justice Department temporarily waived a provision of a tough new bankruptcy law to aid people filing for bankruptcy in Louisiana and southern Mississippi because of Hurricane Katrina.
The department’s United States Trustee Program said Tuesday that for the time being applicants in those areas would not have to undergo credit counseling before they file. Some observers had said the new law, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, would produce hardships for hurricane victims.
The law requires that any debtor who files for bankruptcy after Oct. 17, 2005, must undergo credit counseling within six months before they file for bankruptcy. The law also authorizes U.S. Trustees to approve credit counseling agencies.
U.S. Trustees, who oversee private trusts and promote and maintain efficiency in the bankruptcy system, are authorized to waive the counseling requirementwhere the counseling agencies are not reasonably able to provide adequate services to filers. The U.S. Trustee for Region 5 made this determination for the Eastern, Middle and Western judicial districts of Louisiana and the Southern district of Mississippi.
