A former church pastor, C.R. Marshall asks the Lord each and every day for the ability to pay his bills.

To credit card companies.

To Verizon Wireless.

To Lawrence Memorial Hospital, St. Luke’s Medical Center and more than a dozen other creditors that he owes $97,277.86.

“I hope and pray. I really do,” said Marshall, who reluctantly filed for Chapter 7 bankruptcy protection late last month. “If I can return to work – and I think I can – I can do this. I want to pay my bills. I just need a little more time.”

But with tighter restrictions on bankruptcy filings set to take effect Oct. 17, Marshall simply couldn’t wait any longer – not after heart surgery cost him his full-time job scooping ice cream at a retirement community, and not after the bills that had mounted since then buried him under a pile of problems.

“I knew, if folks would have stopped calling me every night and worked with me, I could have kept my credit in good standing,” said Marshall, former pastor at Second Christian Church. “My creditors were true to me, and I want to be true to them, but I had to get them off my back. I couldn’t sleep at night.

“Lord knows I want to pay my bills, but I got shell-shocked with the new bankruptcy law going on, and I figured I’d better take advantage of this while I still could.”

He’s not alone.

Guillermo Munro/Dallas Morning News Photo Illustration

Bankruptcy filings are surging these days in Lawrence, throughout Kansas and across the country as financially strapped Americans scramble to seek protection from creditors before the new law makes matters more difficult.

New rules await

Come Oct. 17, many potential filers will find themselves subjected to new income limits that could steer them from Chapter 7 proceedings to the more restrictive Chapter 13 process, which requires debtors to set up five-year repayment plans.

Filers also will be required to undergo certified debt counseling sometime during the six months leading up to their filings and also enroll in another financial education class before each case can become final.

The legislation’s goal is to cut down on the number of people who rack up credit cards debts, only to shed such responsibilities through Chapter 7.

But counseling officials don’t necessarily buy that premise.

“Believe it or not, people don’t want to file,” said Julie Lewis, a credit counselor for John Hooge, a Lawrence lawyer who has been handling bankruptcies for more than two decades. “Everyone thinks everyone just uses the bankruptcy laws to get out of paying debt, and that is not the truth. It’s real-life problems that they have. Very few manipulate or abuse it. It’s the loss of a job, a disability, a sickness. It’s not what people normally think.”

Such woes are mounting, and fast.

‘There’s no time left’

The number of cases being handled by Hooge has quadrupled during the past four months compared with the same period a year earlier, Lewis said.

“We’re working 10 to 12 hours a day, every day,” said Lewis, who also works as Hooge’s office manager. “We’ve turned people away. We’ve got people on a waiting list – 20 to 30 people. We’ve stopped taking new ones. There’s just no time left to do it.”

Other professionals, meanwhile, are scrambling to prepare for the next rush: counseling.

Karen Hiller, director for Housing & Credit Counseling Inc. in Lawrence, Topeka, Emporia and Manhattan, is awaiting word from federal officials about whether her nonprofit agency would be certified to provide counseling services to people seeking to enter bankruptcy.

She’s also working to secure additional office space – either inside the U.S. Bankruptcy Court in Topeka, or nearby – so that people can receive the guidance they need as they take care of the formal paperwork at the courthouse.

“It’s a huge challenge for us,” said Hiller, who has four certified counselors on staff – three full time and one part time -3.5 certified counselors on staff plus two more office workers being called into action. “We are qualified to meet it. It’s what we do.”

Taking both classes will cost participants $150, she said.

Lawrence classes to come

In Lawrence, preparatory classes will be offered at 11:30 a.m. every other Thursday at the agency’s offices at the United Way Center. Those classes will be free, Hiller said, and provide general guidance for people wanting to review their financial options before pursuing bankruptcy.

The next step would be scheduling a one-on-one session with Robert Baker, a certified counselor for the agency, to review individual issues and come up with a detailed plan.

Officials with Housing & Credit Counseling are working to prepare for the new rules, but, like other professionals involved in the process – counselors, attorneys and others – the biggest bankruptcy overhaul in a generation will take some getting used to.

“Everybody is taking this one step at a time,” Hiller said.

Marshall, who is awaiting a hearing with creditors Oct. 26 in Topeka, is hoping that his decision to file before the new rules take effect will pay off. But he knows that whatever happens in bankruptcy court won’t solve all of his problems.

“They came to cut off my lights today. They wanted 200-some dollars for my lights,” he said Thursday. “A friend of mine came through. He gave it to me. He came through, because he just got paid today.

“But now I have to pay him back. I can’t keep doing that. I’m trying to find a way out of that now. I need utilities, but, by the same token, a man needs his money back.”

He let out a strained breath. After 71 years, and grabbing odd part-time jobs to supplement his monthly $545 check from Social Security, Marshall just wants his problems to end.

“I’m going to pay, one way or another,” he said. “I just need a little more time.”