In this particular case the debtors were ages 64 and 73. Mr. Peinado could not earn income and a realtor due to the market and could not earn money teaching Spanish as a second language. Mrs. Peinado had been laid off of her job as a paralegal through not fault of her own. They applied for food stamps and were required to use the entire $367.00 for food only. Mrs. Peinado applied for early social security retirement benefits so that they would have something to live on.
Not only did the court call the credit counseling requirement a monumental waste of time, it noted that:
“Yet the Code now requires this extra step, premised on the false notion that most folks,once they realize that they just have to learn how to live within their means, will realizethey really don’t need to file for bankruptcy protection. ”
The court went on to state that “[f]or the Peinados, this extra step is not only unnecessary as a practical matter – there is not amount of ‘re-budgeting’ that these folks can do that will make it possible for them to repay their existing indebtedness – but is also and insult to their honesty and character.”
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Interestingly, in one of the footnotes, the court noted that the real reason for the imposition of many pre-conditions to filing bankruptcy which were imposed by the 2005 amendments had little or nothing to do with the so-called “abuse” but had everything to do with enhancing the profitability of the consumer credit receivables.
If you have questions about chapter 7 bankruptcy Texas or chapter 7 bankruptcy as it is sometimes referred to as, please visit our state pages. Of course, if your interest is chapter 13 bankruptcy, you may visit that page on this website as well.