[richlevy]

Unfortunately, Katrina happened after the recent changes to the bankruptcy laws, which means that some residents cannot declare Chapter 13 after October 17th.

From here

Most of the poorest would still be eligible for Chapter 7, if they could prove that they were poor. I'n not sure if the mandatory counseling applies to those seeking Chapter 7. It would be sort of interesting to make someone pay for financial counseling sessions.

The law contains exceptions for certain groups. For example, disabled veterans and troops on active duty are excluded from the income means test, Plunkett said. People who are in persistent vegetative states and those who are deployed overseas are excluded from the credit-counseling requirement, he said.

Counselor: "Can you tell me the mistakes that got you here?"
Debtor: "Uh, living in front of a Hurricane"

It is nice to know that Terri Schaivo wouldn't have been required to attend a credit counseling session.

The Bankruptcy Abuse Prevention & Consumer Protection Act, which President Bush signed into law April 20, allows only people who earn less than their states' median income to file for Chapter 7 bankruptcy protection, which lets them erase their debts after they forfeit their assets. Those who earn more than the state median income and can repay at least $6,000 over five years must file under a Chapter 13 bankruptcy-reorganization plan, which requires some repayment.

The law would force about 10 percent of debtors to seek Chapter 13 debt relief instead of Chapter 7 protection, studies have found. As a result, creditors would net an extra $1 billion to $4 billion in debt repayments over a five-year period, according to similar studies.

The law also requires bankruptcy filers to submit more paperwork, such as tax returns and paycheck stubs, and to get credit counseling — at their own expense — within six months of applying. It bases a petitioner's current income on the average amount earned for the six months preceding the application.