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New Bankruptcy Law May Affect Katrina Survivors

By Alabama Public Radio

Washington, D.C. – The law prevents debtors who make over the median income in their state from filing a chapter 7 petition. However, many bankruptcy lawyers, especially in Louisiana, are afraid the deadline is too close to tell whether survivors will have to file for chapter 7. One lawyer said his clients will not know whether their homes are salvageable, how much insurance they will receive, whether they'll have a job, or how much federal assistance they will receive by next month's deadline. U-S Senator Jeff Sessions says he opposes delaying the effective date but will consider legislation, if necessary, to deal with the unique problems arising from Hurricane Katrina.

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