Bankruptcy bill clears Senate Committee

[BlueInRed]

They seem to be moving this through pretty quickly.

http://story.news.yahoo.com/news?tmpl=story&cid=584&ncid=584&e=6&u=/nm/20050217/pl_nm/financial_bankruptcy_dc

snip
The U.S. Senate Judiciary Committee (news - web sites) on Thursday passed a bankruptcy bill that would make it harder for consumers to wipe away their debts.

The legislation now moves to the full Senate.

The bill, sponsored by Iowa Republican Sen. Charles Grassley (news, bio, voting record), would impose a means test to determine if bankruptcy filers earned more than their state's median income and could repay at least $6,000 of unsecured debt over five years.
snip

[newscott]

1. To hell with the credit card companies

They are complicit in the debt riddled society we now have. They should take the bath too.

[whistle]

5. Agreed, again protection of business interests while yet another

...contitutional right of individuals being able to declare bankruptcy, wipe out debt and start over. All of the founding fathers did this including Ben Franklin who declared bankruptcy multiple times. Next move if the senate is not stopped will be the establishment of debtors prisons.

[Demonaut]

40. thats why incorporating yourself as a business should allow you

to declare BK without major repercussion

[whistle]

44. individuals can not be incorporated, you must have a business...

...function and a business purpose. Then, if the debts you incur are personal in nature, as most debts are, you are still individually liable. For example, the so called sub-chapter S corporations still hold individuals liable for all personal debt and if personal expenses are hidden in the corporation, you'll have the IRS coming after you for fraud which is a criminal offense. Even your attorney fees must be broken out between business related and personal. No, this legislation has wiped out another constitutional right, the right to declare individual bankruptcy.

[madmark]

45. Well Creating a Closely Held Corporation Really Doesn't Deal With The Issu

Lenders will not as general rule lend money to a closely held corporation without a personal guarantee from a principle or other creditworthy individual. That's why this bill hurts not only middle class wage earners but also small business entrepreneurs.

[DuaneBidoux]

54. Not necessarily...

I went from a sole proprietorship to Sub-chapter S corporation last year and banks still won't look at me. The key is to go into corporation status BEFORE you build up debt if you're in business. I've been in business for myself seven years and the lessons have been expensive.

Oh, by the way, all any Dem would have to do to have some sympathy for the Repuke position on tax simplification is fill out one corporate tax return. I fully understand the appeal of flat tax and would support it in a heartbeat if there were anyway to assure that it is progressive. I am now probably paying less percentage tax than most waiters (absolutely unjust but I'll be damned if I'll unilaterally disarm), but the complexity of the corporate return is incredible . I would like to see some tax reform that takes it back to the progressiveness of the Kennedy years but do something about the complexity.

[BrendaStarr]

74. Well except for the audit that comes along with it.

As a small business person I know that the govt doesn't exactly have to believe any of your figures.

If your lifestyle says you earn more, then you earn more.

Now say you live in a blue area where the price of owning or especially renting a place has skyrocketed in the past few years.

So you wear clothes that are mended, and have been putting off medical and dental care to get by, but to the US government you are living at a level that says you earn more.

Guess what. Audits are so personal in what they can find.

Those subtle signs that you might be a good Republican or one of those "allied with traitors" could help or hurt you.

It doesn't matter though. Bush has made his point clear.

"You can't tax the rich."

So no matter what he's coming after the middle and working classes to make up his massive deficit.

People are such sheep trying to keep that veneer of normalcy (as defined by TV) that they will put up with most anything and blame their spouses, their families, or even (if they have to) their children before figuring out that they are under attack for not being rich.

[madmark]

75. This Hurts the Small Business Entrepreneur Class As Well

Anybody small business person who signs a significant personal guarantee and who's venture fails, under this new bill, will either experience a substantial many-year delay in getting themselves back on their feet for another try, or will simply never be able to come back. This bill is just not an assault on wage earners but also on the small business entrepreneur who one would think would be a constituency that the governing majority would not want to harm.

[Just Me]

10. Amazing set-up: CON "the people" into debt,...

,...knowing "the people's" tax dollars will bail them out AND tighten the noose around taxpayer's neck.

A "win-win" for big creditors and "lose-lose" for common folks.

We, the people, might as well consider ourselves dairy cows cause we are being milked for everything our "owners" can get.

[RUMMYisFROSTED]

42. Moo-lah!

[fertilizeonarbusto]

2. That's why I have no CC

I need nothing that badly. Fuck the vampires!

[Cats Against Frist]

4. Same Here -- last credit card payed off in 2000

Will never have one, again.

[complain jane]

36. Good for you, both of you

I have 2 that I have only in case of an emergency. Came in handy when I blew a tire and really needed all four replaced. Stuff like that. And I pay it off right away.

[MikeG]

3. Mother effing mother effer.

[NewInNewJ.]

6. Ditto

I feel like I am in the Twilight Zone! How can the common American citizen approve of the undercutting of so many? When will it stop?
I really believe George Bush is the Antichrist!!

[BlueJazz]

7. I pissed off one of my acquaintances.

They said that "It was a good bill because then the banks and Credit card companies will lower interest rates"

My answer: "Did you just take a Gullible pill?"

He walked away pissed..

[Just Me]

8. Yet another ANTI-AMERICAN, PRO-CORPORATOCRACY BILL!!!

"The people" are overencumbered while the wealthy and powerful get away with murder.

Why do these Republicans HATE AMERICANS, HATE DEMOCRACY, HATE ECONOMIC FREEDOM, HATE EQUALITY, HATE THIS COUNTRY????

[struggle4progress]

41. The bill should be called "To hell with folks who get sick"

Medical Bills Can Lead to Bankruptcy
Medical illness can be a financial nightmare leading to bankruptcy. Illness and medical bills contributed to more than half of bankruptcy filings, a new report shows.
http://www.foxnews.com/story/0,2933,146157,00.html


MarketWatch:Illness And Injury As Contributors To Bankruptcy
Even universal coverage could leave many Americans
vulnerable to bankruptcy unless such coverage was
more comprehensive than many current policies

By David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and
Steffie Woolhandler

ABSTRACT: In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them. About half cited medical causes, which indicates that 1.9–2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick.

If the debtor be insolvent to serve creditors, let his body be cut in pieces on the third market day. It may be cut into more or fewer pieces with impunity. Or, if his creditors consent to it, let him be sold to foreigners beyond the Tiber.
—Twelve Tables, Table III, 6 (ca. 450 B.C.)

http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.63/DC1

[Supersedeas]

69. no one in the MSM is making that connection, are they? Odd?

[madmark]

71. Well its not Michael Jackson

Its just a fundamental alteration of the economic landscape the middle class and entrepreneurs have to navigate on a daily basis.

[whistle]

46. It's greed in its purest form

[DuaneBidoux]

9. Everywhere they plant the seeds of the next Depression

Getting a fresh start is one thing that has kept the economy going. Business of course does it over and over and over (example US Air). Strangling the consumer and then giving them no way to get out of the noose is a sure way to slow the economy even more. Once the current short lived tax rebate economic spurt is over watch out.

There is abuse of bankruptcy but not to the extent they pretend. Most of the consumers who declare bankruptcy were in a medical situation. God the anti-working-folk laws are a flying out of Congress left and right now. This coming one day after the ban on class action lawsuits. I knew this election was critical for average Americans. I'm fearful the damage being done now could well take a century to undo.

[Just Me]

17. When will everyone take Bush's words about destroying everything,...

,...in order to create anew,...seriously.

I wish I could find the exact speech and exact words he used,...however, I will never, ever forget his implications!!!

This administration is on a serious path of destruction,...in order to "prove" themselves,...even though they have repeatedly failed.

I only hope that, somehow, I can hide myself and my son away from this "administration of destruction"!!! I have the power of my voice and I'll exercise it. But, I'll be damned if I sacrifice myself or my son just because those who have far greater power and influence than I don't have the goshdamned courage to do AT LEAST what I, a common and struggling American, have done!!!

This isn't MY SHIP!!!

[lavenderdiva]

11. does anyone know how long it would take to pass in the Senate,

and if it does pass, how long it would take to become official law?

[FloridaPat]

12. I talked to one lawyer and he said laws take 6 months before it

becomes rule of the land. Also, the heaviest bankruptcy season is during tax time.

[lavenderdiva]

49. sounds like, if we were living in a 'perfect' Shrub-world,

and everything gets passed, etc., it may be the end of the year or beginning of 2006? Thanks for filling me in!

[havocmom]

13. Would help to know, since the bottom is likely to fall out of teh bucket

about 30 days later.

[madmark]

14. This Bill Would be a Disaster for the Middle Class and Small Business PPl

I am a bankruptcy attorney representing debtors and creditors and in my view this bill would be a disaster for middle class people and small business entrepreuners who take risks. Essentially people who should normally be in a Chapter 7 liquidation will be forced in a Chapter 13 bankruptcy which has substantially higher transaction costs (beyond the plan payment to creditors), takes 3 to 5 years prior to receipt of a discharge, and have high failure rates (ie. most Ch 13 plans either dont get confirmed or they dont get completed and no discharge is ever obtained). The net result will be large numbers of people will be permanently saddled with grinding debt and be unable to operate effectively in our economy. The industry behind the bill, credit card companies, will reap short term benefits, but in the long run (though they are too shortsighted to realize this) it will hurt their long term profits as well because their market will be permanently reduced on an ongoing basis. It will also trash the bankruptcy judicial system and cause almost all consumer debtor cases to become pro per as certain provisions make it so lawyers will not be able to work such cases. Even creditor lawyers with any sense are not looking for to that.

Most people live paycheck to paycheck and they are a divorce, illness, injury, or layoff away from insolvency. Anecdotally, maybe 5% of the cases I see could be characterized as irresponsible or abusive. 95% of these bankruptcy filings are not fun lifestyle decisions but responses to personal tragedies. Given the increasing global labor pressure on our workforce and their wages, why on earth would America want to take away from its middle class (and small business person's who take entrepreunerial risk)this very tangible benefit of debt discharge that allows people to recover from these tragedies, get back on their feet, and be productive members of the economy. I think its one of the great things about this country, you can get off the floor from a financial setback and come back.

I know the Gannon thing is pretty compelling right now, but while that nascent scandal is working its way through, this terrible law that will directly and tangibly hurt millions of Americans (in ways even more immediate and direct than almost all the other Bush malfeasance) is quickly moving towards passage. If anybody has any questions let me know.

[Robert Oak]

18. it's an outrage

watch frontline's history of the credit card...

these bloodsuckers want debtors prison and they are going to get it.

Proves to me how little our representives represent our interests.

[madmark]

27. By the way the debtor's prison comment is not as far out as one might

think. Several states have created usery law loopholes that allow "payday" lending. Debtors give a "payday" lender post dated checks coinciding with pay days to obtain loans. If the debtor does not have sufficient funds in their checking account on the date of the post dated check have committed under most state laws a crime, and law enforcement will threaten people with prosecution unless the loan is paid. This is not an exageration. The rates on these loans are almost always usurious (20% plus) and coupled with fees are usually more than double the amount borrowed. Now, the best/worst part, these "payday" lenders receive their funds to lend from the major credit card companies. Now throw in the new bankruptcy bill, and you get a sense of where all this is going. Like I said in my earlier post, this bill will cause more tangible, and direct, harm to more Americans than almost anything else that Bush and Congress are doing.

[Mugweed]

43. Exactly

That's what I thought.  It's setting up a reason to imprison
those who can no longer make payments on their debts, despite
being forced out of their livelihood by their very own
government.  This establishes the reason to round up the
population...starting with the poor, moving on the those who
worked paycheck-to-paycheck and had an unforseen incident that
just happens to inturrupt the cash flow like outsourcing or an
accident or anit-union firings, veterans who no longer qualify
for the same coverage, people who now pay twice or more what
they used to for the same live-sustaining medication while
getting a cut in subsidies elsewhere...

I'm still positive that the threads are showing too much.  I
just don't see anyone in MSM connecting them all to the cause.

[Just Me]

20. I am grateful for your input "madmark". Welcome to DU!!!

:hi:

In my previous life, I practiced law.

This bill appears to wage an all out assault on small businesses and the middle class while simultaneously advance the interests of those at the TOP (big companies)!!! UNBELIEVABLE!

I swear,...I am in shock at the overwhelming corporatism evolving in this country!!!! We are indenturing the American people in order to expand CORPORATE WELFARE!!!!

[DuaneBidoux]

22. I'm from Texas and they're already doing it...

I started a small business about 8 years ago and (as many people)set my credit cards ablaze to do so. Everything was fine until 2001 and I started struggling. I saw an attorney last year and he said that courts, in any case, are already beginning to act as if the law had been passed, making chapter 7 almost impossible, at least in Texas. I'm on an repayment plan which so far is going okay and still allowing me to make a living. The biggest thing was to get the interest reduced so I could actually start making headway on the debt.

But you are right, we are heading toward an a permanent debtor class. We are half way to the days of debtor's prisons now.

[madmark]

25. The United States Trustee's Office Is Already Enforcing A Means Test

However, the current standard is a "bad faith" test and not a specific set of income and expense numbers derived from an arbitrary IRS statistic. Quite frankly, most cases, unless they really are abusive, can be structured such that the "bad faith" challenge from the UST can be avoided in the first place.

[rockedthevoteinMA]

38. Sounds just like what my parents went through.

Had a successful small business until about 2002 when the bottom fell out - cc bills just got to be too much. They were able to file for bankruptcy and were approved (we're in Massachusetts). Thankfully for them it worked out. We ended up having to move in with family, sell the cars, etc. It wasn't that they were bad with the money, it was the CC companies.

Best of luck to you DuaneBidoux! :hi:

[FloridaPat]

64. I saw the writing on the wall last Nov. I did the same thing because

I couldn't get a job as a programmer. They are shipping them out of the country and fast as they can. I filled January and will go to court the end of the month. Being unemployed, I'll be filing chapter 7.

[PassingFair]

56. Do you recommend that anyone with credit card debt

declare bankruptcy now, before passage of this legislation?

[madmark]

62. Well Each Individual's Decision To File Has Many Factors

Whether or not one should be filing for ch7 or any other bk should be determined after consultation with a local competent bk counsel. That said, if was already determined that a filing was appropriate, yes of course the filing should take place before this awful bill became law and effective.

[FloridaPat]

65. Depends on the state. A lot of states you get to keep your home

regardless. If you're unable to pay, now would be a good time. Check with a bankruptcy attorney in your state. They usually have the first meeting free.

[hatrack]

72. It's probably what everybody's going to do anyway

That's the other unintended consequence these boneheads couldn't be bothered to think about. When this goes through (I have NO confidence in Senate Dems even slowing it down), there's going to be a rush to bankruptcy court like we haven't seen since the 1930s.

Yeah, THAT'LL boost the economy. :eyes:

[madmark]

73. That Rush Happened Twice Before

Two other times over the past 6 or so years this awful bill was close to passing and substantial numbers of ppl rushed in to get filings done.

[sunnystarr]

76. Credit card companies don't care because to them there

isn't a long-term problem. They will issue credit cards to the credit challenged people and charge loan shark rates. So it's just another way for them to make more money knowing that these people can't declare bankruptcy again for 7 years.

[madmark]

79. Well the 7 year bar is only if you get the discharge.

My point is that under the new proposed bill, many people just will end up at the end of the day not getting a discharge at all.

[FloridaPat]

15. I head the Bible is against interest. The Jews through most of the

last 2000 years loaned money because their religion allowed the charging of interset. Anything over 10% is considered usury - which use to be immoral. It still is if you or I charge over 10% interest, but it's OK for the banks and credit card companies to do it. How come our wonderful Chirstian leaders are ignoring that Biblical message?

[newscott]

31. I've read Sharia law

forbids charging of interest.

[Langis]

16. Democrats will vote for this

I can feel it, I'm already pissed.

[Just Me]

21. Not the SMART ones! Meanwhile, the REPUKES SCREW PEOPLE!!!

The Republican party is EARNING the reputation of being a "screw 'the people' party"!!!

If they thought they had to work so freakin' hard to recover from the Nixon years,...they have no CLUE how well they are truly screwing their own party of greed, deceit and BETRAYAL.

They hold the ropes, are choking the American people practically to death,...and they deserve what they will get in return for their negative-giving,...TEN TIMES!!!

[madmark]

30. For those of you who still bother

Contact your representatives and tell them that this bill is terrible and should be voted against, and quite frankly is as important (probably more important)than the judicial appointments and should be filibustered. Its that bad and I do not believe I am overstating the matter.

[Jacobin]

47. Well, with lenders having paid $85 million in bribes ..oops contributions

to congresscritters to get this passed, we will have to really pass the hate aroung the country to outbid them.

BTW, a Chapter 13 trustee I spoke with the other days, said the credit card companies have figured out this will screw them. That five year repayment requirement in the new Chapter 13 won't allow huge interest rates on cars to be reduced to market rate, and if the debtor keeps the vehicle, the car payments and living expenses will eat up the Chapter 13 payments that would otherwise have gone to the credit card companies under their greedy little legislative plan.

Truly awful legislation

[madmark]

50. The CC Companies will get short term leverage

They will get increased short leverage (and additional profits)from the legislation by having some people either be delayed in filing a BK or from people not filing at all, or (and what I believe will be the largest category)from people dismissed from failed Ch13's. While people are out of bk protection for these various reasons, CC companies will be garnishing wages, hauling people in for judgment debtor exams, attaching default judgments to homes, calling more employers regarding the debt, and calling the debtor directly, and just generally squeezing a few more short term dollars out of these debtors while they are out of BK protection. I believe the actual payments to creditors from Ch 13 plans will be either a zero sum game, or a net loser, after transaction costs (and loss of interest as you pointed out). The real loser part for the CC companies (which they fail to see in their short term greed) is the permanent shrinking of the market for credit this will cause. For example, people with Ch7 discharges can get car loans and mortgages (lenders want to lend these people money). People in the middle of Ch13 plans without discharges cannot (lenders currently will not lend to these ppl pre-discharge). That said, if CC Companies would continue to make usurious "payday" loans to the insolvent without the need of a discharge, all bets are off and the CC Companies could make a ton of money while the Middle Class goes third world. I'm not a conspiracy theorist, but who knows, maybe that's the master plan, and maybe that's why they are still pushing this terrible bill.

[DuaneBidoux]

51. I thought, for some reason, it was seven years...

But I am interested in understanding more about how it will "screw" the credit card companies when they're the ones who are responsible for the law as written. I know that the impact on consumers will vary significantly between state to state. For example I saw that someone responded to me above saying their parents had to sell the house...in Texas you never lose your primary residence (one reason why all the rich execs doing illegal things love to have huge houses in Texas), you're also allowed to keep one car per wage earner.

[madmark]

53. Under current law you can only get a discharge once every 7 years

I am unaware of how the new law effects that provision but I have not heard any complaints that its being shortened. I think CC Companies can be hurt long term by the bill because right now they like to lend to people after they get discharges. People will not be getting discharges as fast or anywhere the same frequency they are under the new law and therefore I think the CC Companies could be screwing themselves by losing customer base. That said, if they would continue to lend to ppl without discharges under "payday" loan conditions, hell maybe they would still make a ton of money anyway under the new law, and turn the middle class into a third world constituency in the process.

[FloridaPat]

66. I have a friend with terrible credit. She had to get a new car. 30%

interest. Unbelieveable.

[sunnystarr]

77. Makes you wonder what ever happened to our usury laws. (nt)

[madmark]

78. "Payday" Lenders Are Lobbying For And Obtaining Exceptions

To State Usury Laws. "Payday" Lenders are funded by the major CC companies. "Payday" lenders further enlist state criminal laws against nsf checks by requiring post-dated checks to repay the loan at the moment the loan is made. And its in this environment, that debtor-hostile bk legistlation is being passed.

[FloridaPat]

82. Already exempt here in Florida - $30 charge for each $100 cashed,

[FloridaPat]

81. They apply to you and me, not the banks and cc corps.

[Bryn]

80. Welcome, madmark - I filed Chapter 7 2 yrs ago

I filed for Chapter 7 bankruptcy 2 years ago and was granted a discharge here in South Florida. I am still very grateful because it gave me a chance to start fresh and I got back on my feet. I reaffirmed my car and my house. Now I have three new credit cards, Mastercard for in case of emergency with low interest, Home Depot and Dell Computer. U.S. Trustee was very kind to me. He could see I fell into hard time and had tried my best to get out of it by going to Consumer Credit Counseling for several months, but it did not work out. CCC does not help, in fact it made my problem worse, not better. One of credit companies dropped me off CCC and jacked up high interest so that's when I decided to file for Chapter 7.

This bill if passed is going to be terrible for people falling into hard times for various reasons. We will be subjected to predatory credit card/lender companies. If this bill passes, they should make different rules for corporations also so they won't prey on middle class/poor people...will they?

[madmark]

83. Well of course they won't

By moving the bar in favor of CC companies they will market even more aggressively and do it more and more through the "payday" lending model which even more insidious.

[Toucano]

48. Clinton vetoed it once in his term.

I hope Hillary votes "no" this time.

She voted "yes" last time.

[coreystone]

19. How does "BushCo, Inc." eradicate debts incurred by his WATCH!....

Leadership should set an example! If the fiscal example of this administration is the prototype of how the American people should behave in their personal financial affairs, then, we obviously need new role models. If Grassley was serious about assisting the American people in gaining control of their family values and finances, he would introduce MASSIVE financial legislation which would control the "credit card businesses" from "loan sharking" the American people with the TEMPTING "riches" that are not present in the "weekly paycheck"!

[superconnected]

23. it's greed

the creditcard companies are part of the corporate takeover of america.

Our politicians have sold us out - both sides.

We are diverting senseless talk to religion and other things the republicans bring up and skipping the fine print. It's all a diversion for greed. They've only been setting up the structure to rape and pillage our dollars, and enslave us, while we've chattered.

[Trillo]

24. And in possibly related news, Greenspan says

government should cut Fannie Mae and Freddie Mac to avoid "almost inevitable" problems in the US financial sector.
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh56161_2005-02-17_20-14-53_n17663669_newsml

If there's another land value depression equivalent to the 1929 one, will homeowners be able to "walk away" from their bubble-inflated monthly mortgage obligation?

[madmark]

26. The upside down second and third (and beyond) loans on homes

will end up being unsecured deficiency claims against the debtor, and if the debtor can't get a discharge, they will permanently burden and impair the debtor. The perfect storm: terrible restrictive bankruptcy law near the end of a consumer housing bubble.

[Trillo]

28. What about a first mortgage?

Will they be able to "walk-away" if need be? (Leaving the house with the lender.)

[madmark]

29. It depends on the particular state law

I believe most states disallow deficiencies on consumer home firsts, but like I said, it depends on your particular state law. I also believe a small amount of states have some protection for junior lien deficiencies but that is a minority.

[DuaneBidoux]

52. In Texas the downside is that loans against your house other than for home

improvements are not allowed--the good news is that other than the creditor who holds your mortgage, no one else can take your home for what you owe outside of your home, even in bankruptcy.

[madmark]

55. Texas and Florida Have Unlimited Homestead Exemptions

That's nice for Texas and Florida debtors but somewhat inequitable as most other states have 100k to 200k homestead exemptions. Many wealthy debtors (not who I am worried about with respect to this new law) move to these states and buy palaces/residences as an asset protection planning move prior to filing bankruptcy. Ironically, these states are very red with Bush ties. If the Congress and Bush wanted to stop a real abuse they would revise the code to prohibit that behavior. But then again, thats not what this is really about is it.

[FloridaPat]

67. You can always do that.

[Deja Q]

32. If/when I lose my job, I already have plans.

PM me for more info. Caution - have a hard stomach.

[DU GrovelBot]

33. ## PLEASE DONATE TO DEMOCRATIC UNDERGROUND! ##

==================
GROVELBOT.EXE v3.0
==================



This week is our first quarter 2005 fund drive. Democratic
Underground is a completely independent website. We depend almost entirely
on donations from our members to cover our costs. Thank you so much for
your support.

[Deja Q]

34. Why won't anybody look at the predatory nature of the CC agencies?

They are JUST AS guilty as the fools who use them.

And many of them also helped our debt-based economy. How can this hypocrisy work against consumers and yet *'s spending remain tolerable?

[American Renaissance]

35. credit is a two-way street,

It is up to the issuer of credit to determine the credit worthiness of an individual, if a private corporation makes a business decision to give a credit card to every piss broke college student in the country, why should they be entitled to special relief from their business decision?

In college, I was asked to apply for credit cards as part of a study to determine if people who were 100% credit-unworthy would be issued cards.

I got every card I applied for even though my income was zero, I owned no property and had like $90 in my chequing account and no credit history.

[rockedthevoteinMA]

37. Exactly... I'm in school now, and at the beginning of each

semester when I go to the bookstore to get my books, I find my bag filled with at least three or four cc applications. It's sickening. Talk about taking advantage of those who don't know any better. (I don't have any... had one once, that was enough for me.)

[susanna]

60. I think you're absolutely right...

"It is up to the issuer of credit to determine the credit worthiness of an individual, if a private corporation makes a business decision to give a credit card to every piss broke college student in the country, why should they be entitled to special relief from their business decision?"

Damn. That says it all, doesn't it?

I saw a quote once about corps that stuck with me: they're capitalists when times are good, and socialists when times are bad. Can we say "corporate welfare," anyone?

[madmark]

39. For those interested

This website has a copy of the bill available in PDF and additional information regarding the bill. As I posted earlier, IMO it will have terrible consequences for the middle class and small business entrepreneurs who take risks: http://www.bankruptcyfinder.com/bankruptcyreformnews.html

[ArchTeryx]

57. What really worries me...

...is the idea of not being able to purge MEDICAL debt.

I am one of those that killed off all my credit card balances 5-6 years ago and never carried one since. People who get into credit card trouble (with the exception of the poor and the unemployed that have no choice but to use them for life necessities) made their own bed for the most part.

But medical debts tend to be far more crushing then credit card debt, can appear completely unpredictably, and credit card companies have NOTHING on the utterly evil tactics that hospital accounting departments and collection departments use. I had the merest brush with them after a week long hospital stay, but I make regular payments well over state required minimums, and quickly told them to bugger off. It still left me shaken, because they used every intimidation tactic in the book to try and get me to pay way more then I could afford. And that was only a four figure debt -- since I was insured.

The lone comfort is that if the bills got completely out of control, I could purge them with bankruptcy. If that option is cut off too, then I may have no choice, down the road, but to go "underground". I don't really want to become a criminal, but if the #$(#)ing Repucks keep closing off all the legitimate avenues...

-- ArchTeryx

[Lydia Leftcoast]

58. In Japan, where personal bankruptcy is almost impossible and loan

sharking is tolerated, people DO go underground when their debts become impossible to sustain.

There's a novel that's been translated into English, called *All She Was Worth* by Miyuki Miyabe. It deals with just this phenomenon.

[ArchTeryx]

59. I must look into that.

Though right now it's a worst case scenario. My bills are FAR from being that out of control, but all it would take is my chronic condition going completely out of control once, and that would do it.

Break out the Loompanics library, I say, and take a trip back to the 60s. The counterculturists, Phreakers, Yippies, etc, are going to be making a HUGE comeback with Bush and the Rethuglicans doing dirtier then Nixon and Herbert Hoover ever did.

[madmark]

61. No distinction is made between cc debt and medical debt

The proposed new law will make all unsecured debt (medical, cc, or anything else) significantly harder to discharge. For some it will prove to be a bar. And yes, many will go underground and they will not be able to fully function in the economy. That's why the bill is terrible and should be defeated.

[FloridaPat]

68. How about Bush forgiving all those loans for Pakistan, etc.

Anyone besides me pissed off at that? Our money goes to other countries to get rid of debt, but we have to pay with no help from the government? In fact, the government is making everything harder.

[NJCher]

63. landlords were screaming for relief

I did some research on this about a month ago and learned landlords have been among those demanding relief. What a tenant can do (and I know this firsthand as a landlord) is simply quit paying. The landlord takes them through county court to get an eviction. This can take months, even if the landlord files on the fifth day of the first month the rent is unpaid.

And then there are mediation tricks the tenant can play. All this gives the tenant more time to play out the clock.

The same day of the eviction, the tenant runs down to bankruptcy court and files. There is no serious intention of following through on the bankruptcy; it is a fraud perpetrated using the courts to continue their stay in a place for which they aren't paying. Meanwhile, the landlord has to pay the mortgage and taxes and there is not one red cent coming in to cover it.

Sometimes the tenant gets really abusive and files serial bankruptcy. The debtor can do this without expending one penny for the fee. Meanwhile, the landlord has to pay $150 per motion just to get the nonpaying bastards out. A landlord can file for prospective relief but that doesn't mean it will be granted.

Reform is needed. Maybe this act isn't perfect but at least parts of it should go forward.

I read section 311 from the pdf posted upthread (the part that affects the automatic stay) but since it's late and I'm tired, it doesn't make a lot of sense to me. Will tackle it again tomorrow.

Here's a good link for those who want more information on it:

Bankruptcy Legislation and Reform News:

http://www.bankruptcyfinder.com/bankruptcyreformnews.html


Cher

[madmark]

70. Its Called Serial Filing

People can file Ch 13's get stay relief and then dismiss them at will. A Chapter 13 is the best vehicle to file if you're not serious about getting a discharge but just want to file to get temporary stay relief to slow down a state court procedure. A 7 can potentially do the same thing but getting the dismissal is a little more uncertain and tricky and requires some finesse.

Ironically, the new bill will force people into filing 13's instead of 7's. I believe there are some provisions dealing with serial filing but that is not the bill's focus and they do not resolve the problem you described above. The new bill isn't interested in reforming real abuses such as serial filing or forum shopping for unlimited homestead exemptions, its designed to reduce the speed and volume by which ppl get dicharges of debt by forcing ppl who should otherwise be in ch7's to ch13's. There are other awful things in it too, like making it virtually impossible for a consumer debtor to get an ethical or competent attorney, but the forcing into the 13's is the worst part.