Congress makes it harder to file bankruptcy

[Count of Montesano]

I admit I've was sleeping when this bill passed the House and Senate in early March, but listening to NPR this morning I heard about how the US Congress just made it harder to file for bankruptcy. The new law forces most people to repay any credit card debt or healthcare debt even if they have to sell their homes (which used to be protected under old Chapter 7 and 13 laws). My understanding is even child welfare payments can be tapped to pay off credit card debts if you go bankrupt, although the law nebuliously says "child support will be considered a top priority in bankruptcy cases." National Guard who are called up are not protected, though disabled veterans are.

Oh, the kicker is some states such as Texas and Florida have special homestead provisions that allow the super wealthy to keep their houses, no matter if they live in a $15 million mansion.

While I'm pissed at the spendthrifts who run up crazy debts, about half of Americans who filed last year did so because of extreme medical bills or losing their jobs and just trying to survive.

More info is available here:

www.debtslavery.org

[imb39]

I just wish that credit card companies take some of the responsibility as well. It is ridiculous how much credit you can get. All of it at exhorbitant rates! I also think it is ridiculous that exemptions are made for the very wealthy. IMO it should be the other way round!

If your understanding about child support is correct, then that is scandalous...

[Gelatinous Cube]

Another victory for big money! :crying

[imb39]

Isn't democracy a wonderul thing...

[MadBurgerMaker]

Of course, you could always...say...NOT SEND IN THE CREDIT CARD APPLICATIONS when they come to you in the mail if you cant afford to have one...

:shocked

Take some responsibility for yourself?! NO WAY!!! INCONCEIVABLE!!

You should absolutely be responsible for your credit card bills. Did someone force you to run them up? No? Then pay your damn bill!

Another victory for big money! crying.gif

:lol Incredibly funny....

Look...If you cant pay a credit card bill, dont get one, dont run it up...simple as that. This must be a mind boggling proposition for some people..........

I just wish that credit card companies take some of the responsibility as well. It is ridiculous how much credit you can get.

Of course! The fact that the consumer says "yesyesyesyesyesyes" to everything the credit card company offers is the CREDIT CARD COMPANIES FAULT!! Maybe if those people simply said....hmm..whats that word...its really lon...oh yeah...the word is NO. Wow...that ones pretty hard to remember, isnt it?


@Count

A non partisan website (or at least just a normal news one) would be a much better place to find facts on these sorts of things. They may show ALL angles (or more of them), instead of the ones that make their side look good.....

Seriously:

DebtSlavery.org

Founders:

* Democrats.com
* Progressive Democrats of America
* People&#39;s Email Network (<---------who the hell are these guys??)

Try something like this next time, if you want to REALLY mess up people&#39;s eyes:

Some Library of Congress page
-------------------
SUMMARY AS OF:
3/10/2005--Passed Senate, amended. (There are 2 other summaries)

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 - Title I: Needs-Based Bankruptcy - (Sec. 101) Amends Federal bankruptcy law to revamp guidelines governing dismissal or conversion of a Chapter 7 liquidation (complete relief in bankruptcy) to one under either Chapter 11 (Reorganization) or Chapter 13 (Adjustment of Debts of an Individual with Regular Income).

Permits the bankruptcy court to convert a Chapter 7 case to either Chapter 11 or 13 with a debtor&#39;s consent. (Current law requires the debtor&#39;s request for such a conversion.)

(Sec. 102) Permits the court upon its own motion, or upon the motion of the bankruptcy trustee, bankruptcy administrator, or any party in interest, to move for a dismissal. (Current law prohibits a party in interest from entering such motions.)

----------------
It just goes on and on...Im going to bed....You guys have fun going through the actual bill instead of some article basically written by a political party. Concerning healthcare debt: Why not? Who else is going to pay the (presumably massive) expenses? Seriously....Who?

Now...from what I understand from previous reading about this thing (not the actual bill..Im too tired for that garbage), the bankruptcy thing requires people with incomes above a certain level to pay credit card charges, medical bills and other such obligations. Here...from a thing on Yahoo (some AP business writer person):
----------------

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, according to the American Bankruptcy Institute.

The bankruptcy measure would set up an income-based test for measuring a debtor&#39;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&#39;s median income who can pay at least &#036;6,000 over five years - &#036;100 a month - would be forced into Chapter 13, where a judge would then order a repayment plan.

The legislation also would require people in bankruptcy to pay for credit counseling.

New personal bankruptcy filings edged down from 1,613,097 in the year ending June 30, 2003, to 1,599,986 in the year ending last June 30, breaking an upward trend of recent years.

Under the current system, a federal bankruptcy judge determines whether individuals must repay some or all of their debt.

------------------

[imb39]

I agree that the consumer needs to accept responsibility BUT the credt card companies need to accept SOME responsibility

[MadBurgerMaker]

Originally posted by imb39@Apr 17 2005, 04:03 AM
I agree that the consumer needs to accept responsibility BUT the credt card companies need to accept SOME responsibility

For what? What exactly are they doing wrong? Theyre offering a service to people....

Its up to the person who recieves the offer to accept or deny that service. Theres no reason to hold a credit card company responsible because some guy they mailed an application to ran his bill up so much he couldnt pay it anymore. A credit card is the consumers responsibility...period...They accepted the terms, they ran up the bill.....they pay the bill....

[imb39]

At the end of the day some people are just plain s*it with money or plans change (eg redundancy, medical problems etc). And I do wonder if the companies are careful enough when offering credit, that&#39;s all I&#39;m saying. I don&#39;t beleive that you should be let off the hook in paying back. Also, in Britain at least, companies offer credit to teenagers (18 year olds) - money management is not top of their agenda. I&#39;m not saying that the teenagers are right but the companies should be more careful.

[Big War Bird]

I have had about 30K in credit card deb for almost 6 years now. And I haven&#39;t paid a single penny in interest charges that whole time. In fact I&#39;ve earned about &#036;5000 off those very same cards in that time and earned &#036;3000 toward a new car from GM. I just got a new credit card that pays 1% into a tax fre 529 college investment plan.

If you are paying interest on any credit cards you are just plan dumb.

[Crandar]

Originally posted by Big War Bird@Apr 17 2005, 08:08 AM
I have had about 30K in credit card deb for almost 6 years now. ...If you are paying interest on any credit cards you are just plan dumb.

Do not confuse having credit capacity in terms of the size of your line of credit -or_ the fact that you may use your credit cardsa actively as a payment transaction device with anything even remotely resembling debt.

My wife and I charge about &#036;30,000 per year to our credit cards but then instantly pay the bill each month and pay no interest. This is not the same as debt. In addition to normal transactions, last year my wife bought a new Miata using her MasterCard because that approved credit worthiness provided the simplest method to close the transaction. When the bill came at the end of the month she had transferred over cash from savings and just wrote a check to clear the bill so no interest was paid.

Debt is not the same as making use of the credit worthiness that you have earned through good conduct.

[Big War Bird]

I am talking about genuine real debt, I don&#39;t have to pay off the balancess every month. In fact I almost always make minimum payments the debt portion of the two cards I have that maintain high balances. Up until two year ago my credit worthiness was quite poor, but I was still able to game the system to make my debt actually produce income.

[Crandar]

The type of credit card abuse that you describe is exactly what the current round of changes is designed to help address. If you have 30K in unpaid credit card debt and are only making minimum payments per month then you are making a terrible error in judgement and the interest is escalating you endebtedness each month. A &#036;30k debt balance sucks away the equivalent more than &#036;485 in interest every month.

The new laws just allow the companies to eventually come after you and regain peayment instead of rewarding your irresponsible choice at what you think is "gaming the system"

[Akhilleus]

Originally posted by Count of Montesano@Apr 15 2005, 01:57 PM
I admit I&#39;ve was sleeping when this bill passed the House and Senate in early March, but listening to NPR this morning I heard about how the US Congress just made it harder to file for bankruptcy. The new law forces most people to repay any credit card debt or healthcare debt even if they have to sell their homes (which used to be protected under old Chapter 7 and 13 laws). My understanding is even child welfare payments can be tapped to pay off credit card debts if you go bankrupt, although the law nebuliously says "child support will be considered a top priority in bankruptcy cases." National Guard who are called up are not protected, though disabled veterans are.

Oh, the kicker is some states such as Texas and Florida have special homestead provisions that allow the super wealthy to keep their houses, no matter if they live in a &#036;15 million mansion.

While I&#39;m pissed at the spendthrifts who run up crazy debts, about half of Americans who filed last year did so because of extreme medical bills or losing their jobs and just trying to survive.

More info is available here:

www.debtslavery.org

its crap.
once again, the government is passing laws that screw the people who need them the most. if a massive company, like enron, for example, all of a sudden declairs bankruptcy, oh, too bad, its investors lose everything they put into it, the employees all lose thier jobs, and thousands upon thousands of people are financially screwed. meanwhile, the bankruptcy laws protect the companys&#39; CEOs and whatnot from losing a dime as a result of thier unethical and impropper actions.
and honestly, i dont know why big business supports laws that limit corporate bankruptcy, because, quite frankly, when nig companies declair bankruptcy and screw thousands of "little people" big corportations lose money, even unaffiliated ones, simply because of assosiation.
meanwhile, a man with 2 jobs, trying to pay off his wifes&#39; chemo therapy bills and kids&#39; education bills, cant declair bankrupcy without paying off the &#036;70,000 he has in debt; and as a result, simply gets into a worse and worse financial decision.
i mean, why make a law if it doesnt help those who need it (instead of those who use it to screw people)?

btw, if you successfully sue a big corporation for massive improprieties (for example, a cigarette company, or enron-esque lawsuits) the minite they declair bankruptcy, they dont owe you a penny.

[Big War Bird]

I&#39;m not breaking any law or doing anything remotely illegal or severly unethical. If Citibank wants to write me a &#036;10,000 check (which they have done 5 times) to do with as I please, with no interest and no obligation to repay anytime soon, I am more than happy to take their money. 10k at 5% simple interest is &#036;500 for me (not much really but it is a car payment and a half) never mind that the present value of the original 10k is forever deminishing. Sooner or later Citibank will realize its throwing away its money to me (Disover card already has) Which is fine by me. Chase Manhatten just cut me a check for 5Gs a few months ago. All I am doing is using other peoples money to make money for myself, and thats the best way to do it

[Count of Montesano]

Another interesting look at how this bill will affect everyday Americans just trying to make it, especially recently divorced single mothers.

http://moneycentral.msn.com/content/Bankin...573.asp?Printer


Once again, I agree spendthrifts need to be held accountable, but this law has been slammed in the media, by labor organizations, and most interestingly, by consumer groups as offering only protection for big business, nothing for the working American who faces huge rising costs (gas for one) and increasingly stagnant wages.

[Erik]

Originally posted by MadBurgerMaker@Apr 17 2005, 07:11 AM

I agree that the consumer needs to accept responsibility BUT the credt card companies need to accept SOME responsibility

For what? What exactly are they doing wrong? Theyre offering a service to people....

Its up to the person who recieves the offer to accept or deny that service. Theres no reason to hold a credit card company responsible because some guy they mailed an application to ran his bill up so much he couldnt pay it anymore. A credit card is the consumers responsibility...period...They accepted the terms, they ran up the bill.....they pay the bill....

Credit card companies have to accepts some responsability, not because they are doing something wrong but because it&#39;s a fundamental part of their business.
Taking responsability for financials risks is what those companies are all about, and it&#39;s the reason why they make money.

Here is how it works:
When you wave your credit card in a shop, the shopkeeper accepts it as a way to pay for their goods because he trusts the credit card company wil pay for the goods even if you don&#39;t pay your bills.
The credit card company in turn makes sure they have some extra cash laying around in case somebody doesn&#39;t pay their bills, if they didn&#39;t no shops would accept their cards.
This extra cash comes from interest rates earned from people who don&#39;t pay their bills on time.

Of course the credit card company has to be carefull not to give too much credit to people who can&#39;t be trusted to eventually pay the bills.
This is exactly where their responsability comes from.
If they made the mistake of giving credit to people who can&#39;t afford to pay it back they should expect to loose money from it.
If you (try to) take away all of their responsability everybody can start a credit card company.

And now for a very interesting bit:
Lowering the financial risks of credit card companies wil only do one thing: they wil give bigger credit to people who can&#39;t realy afford it&#33; :w00t
Because more credit means more debt, more interest and (with the lower risks of people filing bankrupcy) more profit&#33;

So this bill wil not reduce debts but it wil increase it&#33; and this is EXACTLY what the Bush government wants because more debts means more spending and a stronger economy (on the short term).
Of course you can&#39;t just keep on borrowing money, so on the long term it wil slow the economy down when the debts have to be re-paid, but Bush hopes it wil happen when he is no longer president (making it "not his problem").

[MadBurgerMaker]

I understand how credit cards work. Between my wife and I, we (unfortunately) have something like 6 or 7 of the damn things, and christ...they make a person poor. I dont blame the credit card companies, however, because all they did was send me some blank forms in the mail to fill out if I wanted. I was the one who kept buying (really nice :p) stuff with them, not the companies.

It is NOT the responsibility of the credit card company when it comes to YOU putting YOUR signature on a credit card application, and taking that new card to a store and buying things, which, incedentally, also requires YOUR signature. Thats all there is to it. People need to take some responsibility for THEMSELVES and not complete and send those forms back if they cant afford it. If they do make the mistake of getting the card and running it up until they can barely afford it (like Ive done), they need to suck it up and pay for what theyre responsible for. You cant just go max out a credit card, then go crying to the government that you cant pay.

And now for a very interesting bit:
Lowering the financial risks of credit card companies wil only do one thing: they wil give bigger credit to people who can&#39;t realy afford it&#33; woot.gif
Because more credit means more debt, more interest and (with the lower risks of people filing bankrupcy) more profit&#33;

So this bill wil not reduce debts but it wil increase it&#33; and this is EXACTLY what the Bush government wants because more debts means more spending and a stronger economy (on the short term).
Of course you can&#39;t just keep on borrowing money, so on the long term it wil slow the economy down when the debts have to be re-paid, but Bush hopes it wil happen when he is no longer president (making it "not his problem").

Again...all this relies upon the consumer actually filling out the required forms and sending them back to the credit card company, or calling them and filling out an application on the phone, or online. They actually have to MAKE A PERSONAL EFFORT in order to get a credit card. You cant just sit on the couch watching TV all day and suddenly have a maxed out credit card....

Take some responsibility for yourself, stop blaming Bush and the government for EVERYTHING. Christ...I once again find myself basically defending a political party and a President that I dont really like because the other side has gone so far out there, I can barely relate to them at all anymore.

Another interesting look at how this bill will affect everyday Americans just trying to make it, especially recently divorced single mothers.

http://moneycentral.msn.com/content/...73.asp?Printer


Once again, I agree spendthrifts need to be held accountable, but this law has been slammed in the media, by labor organizations, and most interestingly, by consumer groups as offering only protection for big business, nothing for the working American who faces huge rising costs (gas for one) and increasingly stagnant wages.

Those are sad stories. Really...Im heartbroken...Right up until I remember my own mom raising my sister and I on her own (my dad divorced her when I was less than a year old) on a teachers salary....WITHOUT EVER DECLARING BANKRUPTCY. It can be done, its just not easy.

But here...a quote from your own article:

"Williams, a financial counselor for nearly 25 years, does not think the new bankruptcy law will affect women too disproportionately because a means test takes income into account. "Those who will feel the biggest impact will be filers who have the income to repay the debt but just don&#39;t want to," she says."

Take a deep breath and read that quote again. Those who will feel the biggest impact will be filers WHO HAVE THE INCOME TO REPAY THE DEBT BUT JUST DONT WANT TO. That makes this just about perfect in my eyes.

[JP226]

Just stay away from credit cards. Spend what you earn, don&#39;t spend then hope to earn it down the road. I don&#39;t see the big deal. Personally I don&#39;t use the damn things, check cards work much better, because you are spending money that is yours, not some other company&#39;s. It&#39;s easy and conveinent and I don&#39;t have to make any payments down the road.

[Erik]

Originally posted by MadBurgerMaker@Apr 20 2005, 01:23 PM
It is NOT the responsibility of the credit card company when it comes to YOU putting YOUR signature on a credit card application, and taking that new card to a store and buying things, which, incedentally, also requires YOUR signature. Thats all there is to it. People need to take some responsibility for THEMSELVES and not complete and send those forms back if they cant afford it. If they do make the mistake of getting the card and running it up until they can barely afford it (like Ive done), they need to suck it up and pay for what theyre responsible for. You cant just go max out a credit card, then go crying to the government that you cant pay.

It&#39;s the responsability of the people to pay back their debts, but it&#39;s the responsability of the credit card company to avoid giving money to people who can&#39;t be trusted.
There are always some people who won&#39;t (or can&#39;t) pay their bills, and this is (and should be) for some part the problem of the companies who gave them the loans.

You want to take away the risk for the credit card companies, but this only means that other companies (banks, hospitals, the government etc.) see less money if somebody files bankruptcy.
What is so special about credit card companies (compared to other companies that give out loans) that they have to be protected against people filing bankruptcy?

Credit cards are the easiest way for people to lent money.
This puts credit card companies at bigger risks than other companies (who, for example, claim your house or car when you don&#39;t pay them back), and that in turn is why their interest rates are much higher.
Why would you want to disrupt this system by giving credit card companies special powers?

[MadBurgerMaker]

Originally posted by Erik@Apr 20 2005, 03:09 PM
It&#39;s the responsability of the people to pay back their debts, but it&#39;s the responsability of the credit card company to avoid giving money to people who can&#39;t be trusted.
There are always some people who won&#39;t (or can&#39;t) pay their bills, and this is (and should be) for some part the problem of the companies who gave them the loans.

You want to take away the risk for the credit card companies, but this only means that other companies (banks, hospitals, the government etc.) see less money if somebody files bankruptcy.
What is so special about credit card companies (compared to other companies that give out loans) that they have to be protected against people filing bankruptcy?

Credit cards are the easiest way for people to lent money.
This puts credit card companies at bigger risks than other companies (who, for example, claim your house or car when you don&#39;t pay them back), and that in turn is why their interest rates are much higher.
Why would you want to disrupt this system by giving credit card companies special powers?

This whole "personal responsibility" thing seems to be going over your head. You cant hold SOMEONE ELSE responsible for YOUR OWN ACTIONS.

How about this....You go and find a nice new car, so you run over to the bank and get a car loan for that nice new car. Since your credit rating sucks or is nonexistant, you get a ridiculous interest rate..say...20%. "No worries" you think, and sign all the forms. About a month later when your first &#036;600 payment is due, you realize you cant pay it. Is that the banks fault?

NO. THATS YOUR OWN FAULT. And dont give me any BS...ANYONE can get a crappy high interest car loan like that.

The same thing with a credit card. You use it, you now have a loan, which you need to pay back. You cant blame the damn credit card company for giving you &#036;1000 in credit even though YOU cant afford it. Nobody forced you to even ACCEPT that card, let alone USE IT.

This whole "blame someone else for my screwups" mentality just blows my mind.


You guys also need to be reading more about this thing.

The measure contains an income test to determine if people should enter compulsory repayment plans, rather than have their assets liquidated to repay creditors.

Williams, a financial counselor for nearly 25 years, does not think the new bankruptcy law will affect women too disproportionately because a means test takes income into account. "Those who will feel the biggest impact will be filers who have the income to repay the debt but just don&#39;t want to," she says

Supporters of the bill said bankruptcy often was the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires -- often celebrities -- who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.

What I find interesting is this crying about medical bills, credit card debt, etc. The words "medical bills" and "middle class" seem to be key words for this sort of thing. Oh, and dont forget "big business." :rolleyes

If they can afford to pay it back without declaring bankruptcy, they wont be allowed to declare. Whats so bad about that? What? You think that even though someone makes enough money to pay these things off, they shouldnt have to? Seriously?

If theyre just some middle class family with &#036;1,000,000 in medical bills, then theyll be able to declare bankruptcy, with all the usual stuff associated with it. Relax with this sudden crusade for the middle class, single mothers, etc. Everything will die down shortly, and pretty soon the middle class and single mothers will have been totally forgotten...again...for some other short lived, "righteous" crusade.