301 See also letter from Nicholas H. Penfield, Retail Bankruptcy Officer, Peoples Heritage Bank, Portland, ME (August 14, 1997); Letter from George J. Wallace, on behalf of the American Financial Services Association (February 21, 1997), to the National Bankruptcy Review Commission (recommended a review of the development of the reaffirmation process, which generally works well); Memorandum by Charles L. Williams, III to Sarah B. Cummer, Federal Compliance Counsel, Credit Union National Association, Inc. (January 20, 1997) (confirmation process should continue without judicial review); Letter from Steven D. Goldstein, Chairman of the Credit Department, Sears Roebuck and Co. (August 6, 1996) to the National Bankruptcy Review (Bankruptcy Act should contain a clear legal authorization allowing the creditor to contact the debtor for confirmation and that the courts cannot intervene in voluntary confirmation agreements that otherwise comply with the requirements of the code). Back to the Text Many empirical studies show that Chapter 7 debtors have debt burdens that far exceed their ability to repay. (334) As some debtors have entered these circumstances by underestimating their inability to meet these debts (335), the assertions exacerbate this problem.

Preliminary results from the Creighton Bankruptcy Reaffirmation Project show that debtors in all districts studied did not have sufficient monthly income to cover both their monthly expenses and confirmed debt payments. (336) Even debtors who did not confirm housing debt confirmed on average more than 23% of their total income, excluding interest on confirmed debts. (337) When Chapter 7 debtors come out of bankruptcy, which are so heavily burdened by debts, they are prevented from recovering a financial guarantee. New assertions could be an important factor that would lead to repeated bankruptcy applications. 321 id. Table XZ, confirmations by type of guarantees (30% of confirmations were for car credits). Back to the text Perhaps the strongest evidence of general non-compliance with the law came from the creditors themselves. Sears, one of the country`s largest retailers, was the first to admit that it was signed a “court decision on fire.” (352) These problems were revealed publicly when a person from Massachusetts wrote to the bankruptcy judge, who had led his former bankruptcy file, stating that he was overwhelmed by his monthly bills and that he was having difficulty feeding his children.