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DOJ division waives new bankruptcy law requirement for Katrina survivors

[JURIST] The US Trustee Program [official website], a division of the US Department of Justice, announced Tuesday that for people living in Louisiana and southern Mississippi it would waive a new requirement that those filing for bankruptcy undergo credit counseling. Many had expressed concern [JURIST report] that the new Bankruptcy Abuse Prevention & Consumer Protection Act [PDF text], approved last spring [JURIST report] and set to take effect Oct. 17, would worsen the situation for many already financially stricken by Hurricane Katrina [JURIST news archive]. Trustees, who help manage the nation's bankruptcy system, have authority to waive the credit counseling requirement in areas where no agencies are available to provide counseling to filers. Credit counseling agencies have been approved to serve Louisiana and Mississippi, but none of the agencies are actually located in the states. Other provisions of the new law that require more people to file for Chapter 13 bankruptcy requiring some repayment still are set to take effect later this month. The US Trustee Program has a news release on the announcement. AP has more.

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