Other implications of current affirmation practices. The high number of affirmation agreements — submitted and not submitted — in the consumer insolvency system has an impact on the financial rehabilitation of debtors, but several other types of problems related to new reporting were also identified during the Commission`s consumer insolvency interviews. 333 i. See also In re Hovestadt, 193 B.R. 382 (Bankr. D. Mass. 1996) (a new debt would result in the debtor having a negative cash flow according to the schedules, and yet the lawyer signed an affidavit in which he stated that a new statement would not cause unreasonable harshness). See also letter from Hon.
Arthur J. Spector, bankruptcy judge, E.D. Me. Melissa Jacoby, (20 May 1997) (provision of tapes and transcripts of confirmation hearings accompanied by several confirmations exceeding the debtors` capacity to pay); In re Lantanowich, 207 B.R. 326 (Bankr. D. Mass 1997) (debtor agreed to repay $1000 plus interest to obtain a $200 line of credit). Back to text The current redeclaration requirements expressly require an affidavit from a lawyer attesting that the proposed confirmations do not cause unreasonable harshness to their clients. Recent practices indicate that some lawyers sign these affidavits with little or no attention to this requirement. The Honourable John Akard of Texas wrote in the final days of the preparation of this report to the Commission to present a stand-by agreement signed by the debtors in its court. The deal required them to repay a loan for a pickup truck that cost $18,027.71 over fifteen years. With compound interest, debtors would pay a total of $42,861.84.
Judge Akard asked the debtor`s lawyer for the length of the payment, on which “the lawyer admitted to having neglected this fact”. It is not surprising that the new confirmations have been at the centre of the Commission`s hearings and debates on consumer bankruptcies. From the earliest days to the last days, the Commission`s registration is filled with written and oral testimony on whether affirmation agreements undermine or facilitate the consumer insolvency system. While views on the usefulness of affirmation agreements may differ, most recognize that affirmations are far more creditor. Creditors, debtors` representatives, trustees, scientists and judges told the Commission that many creditors are seeking repeat agreements as a routine part of their participation in bankruptcies. . . .