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Haines on KFNN
Haines on KFNN
Judge Randy Haines
The residential mortgage crisis is having little effect on the increase in bankruptcy filings this year in Arizona, U.S. Bankruptcy Judge Randolph Haines recently told a local radio audience.
Instead, the rise is due to a gradual understanding of a new law that has made filing more difficult and expensive, Haines, an adjunct professor at the Sandra Day O'Connor College of Law, said during an interview on KFNN 1510 Financial News Radio. He spoke with Ken Morgan, of KFNN, and Jim Garber and Sean Balog, of Wachovia Corp., during the Business for Breakfast program.
"A change in the law in 2005 got a lot of people believing that bankruptcy relief wasn't available to them anymore, and the filings dropped off," Haines said. "The intent of the law was to stop bankruptcy abuse."
Shortly before the law became effective, he said, bankruptcy lawyers began encouraging people to file for bankruptcy sooner rather than later, implying that the new law would prevent them from doing so. Now, filings are rising as more people understand the process still is available to them and as more attorneys and document preparers are learning the complexities of the law, Haines said.
Recent sharp rises in mortgage defaults likely have no direct link to the rise in bankruptcy filings, he said, because a loan on a principal residence can't be modified in a bankruptcy. However, filings are up due to job losses and the credit collapse, Haines said.
To listen to the full interview, visit