Posted on 04/14/2005 5:32:21 PM PDT by atrocitor
NEW YORK (CNN/Money) – In a widely expected move, the House on Thursday approved a bankruptcy reform bill that has already passed the Senate.
The House vote virtually guarantees the bill will become law. Soon after the House vote, President Bush said in a statement that he would sign the bill. That could happen as early as next week.
The reform bill will make filing for bankruptcy more difficult, and it will give creditors more recourse in some instances.
So, experts say, if you were thinking about filing for bankruptcy to clear your debts, you might think twice -- or act twice as quickly, since major provisions go into effect six months after the bill is signed into law.
"The bill simply doesn't balance responsibility between families in debt trouble and the creditors whose practices have contributed to the rise in bankruptcies," said Travis Plunkett of the Consumer Federation of America in a written statement.
(Excerpt) Read more at money.cnn.com ...
It is not possible to plan for all contingencies.
Actually, we pay more because of stupid bank officers who issue credit to people they know can't pay them back.
This won't prevent those that really qualify for bankruptcy to file:
Between 30,000 and 210,000 people -- from 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy each year in exchange for forfeiting some assets -- would be disqualified from doing so under the legislation
Taking effect six months from enactment, the bankruptcy measure would set up an income-based test for measuring a debtor's ability to repay debts. Those with insufficient assets or income could still file a Chapter 7 bankruptcy, which, if approved by a judge, erases debts entirely after certain assets are forfeited.
Those with income above the state's median income who can pay at least $6,000 over five years -- $100 a month -- would be forced into Chapter 13, where a judge would then order a repayment plan.
$100 per month.
My cable/internet bill is higher than that.
Self responsiblity.
What a concept!
I hear you. However, with a relative in banking, I hear some of the most outrageous things that are apparently legal. For example, apparently, some banks rely on a certain percentage of their credit cards being charged out at the higher interest rate, using that as their profit projection.
Really? You're against people having to pay off their own bills? My beeber is stunned.
As opposed to charging the rest of us for someones elses carelessness?
Kind of like the insurance industry? I think the government should get out of bed with those companies, too.
Dems were against it. That's enough for me to be in favor of it.
Where did I say I am against people paying their bills?
You have to pay your bills or you will suffer the consequences which include the state law creditor remedies of garnishment (wage and bank accounts) and non-exempt asset executions. Existing Ch 7 Bankruptcy is essentially an orderly accelerated version of the state law remedies (the trustee does the work instead of individual creditors) but with a cut off of creditors rights to future income unless the debtors income is judged too high in which case the bankruptcy can be dismissed for bad faith.
These are the current rules. The question is, why is the state changing those rules under which billions of debt contracts were already formed in favor of the lender after the fact? Like I said before, my problem with the bill would decrease dramatically if it only applied to prospective debt.
Also, what some of the pro-bk bill people fail to acknowledge is the macroeconomic benefit of the "fresh start". Its one of the things that separates us from the third world, both morally and as an matter of economic performance. When you fail financially in America you have (under the existing system) a chance to make a comeback and be economically productive. To take an extreme example, in Thailand if you fail financially, you get to sell your children and/or yourself into sex slavery (I'm not kidding). Morally abhorent and macroeconomically unproductive. Believe it or not, one of the reason our society kicks ass economically is that we have (up until now) applied the "fresh start".
Same problem with south jersey vs. north jersey, and in south jersey there is a HUGE difference between Cherry Hill and Camden. It's going to be a logistical nightmare. I think I need to look for another area of law.
Well pukin dog did not answer this question, maybe you will. Would it be fair, or conservative, for the state to remove legal protections that creditors had relied on when they had lent billions of dollars to debtors?
The only thing this legislation is targeting is the profit line for the credit card companies. This is a HUGE win for them and a sad defeat for consumers. I guess no one is allowed to make mistakes anymore. And the thing that just burns my butt about all of this is the sheer hypocracy of it. Does the govt spend within it's means? Is the national budget balanced? How can these idiots that represent us do this when they can't do what they preach?
Thanks for this post. I agree with you for the most part. It will be sad if the passage of this bill causes just what you mentioned. What will some people be forced to do to get rid of their debt (a lot of while is ridiculous rates)? Will they resort to suicide? Prostituion? illegal activities? What?
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