Flashback: Bush signs tougher bankruptcy bill into law

msnbc ^ | 4/20/2005 | The Associated Press

[ExxonPatrolUs]

WASHINGTON — President Bush signed the biggest rewrite of U.S. bankruptcy law in a quarter century on Wednesday, making it harder for debt-ridden Americans to wipe out their obligations. “Bankruptcy should always be a last resort in our legal system,” Bush said. “If someone does not pay his or her debts the rest of society ends up paying them.” Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law, which will go into effect in six months. The 500-page legislation won final congressional approval last week after being pushed for eight years by banks and credit card companies. The measure would require people with incomes above a certain level to pay some or all of their credit-card charges, medical bills and other obligations under a court- ordered bankruptcy plan. Bush said the new law makes the financial system fairer for debtors and creditors. “The act of Congress I sign today will protect those who legitimately need help, stop those who try to commit fraud and bring greater stability and fairness to our financial system,” Bush said.

[BobL]

It is a good law. But it was only needed because lenders WILL ALWAYS lend money to deadbeats. It defies logic...but that is life.

[First_Salute]

A terrible law that protects crony-capitalists and banksters and may as well have been called TARP I.

[MeneMeneTekelUpharsin]

How is this going to impact folks now? People should cut costs and pay their debts. So should the government.

[Gil4]

Should have applied to GM as well.

[AndyJackson]

It is a good law. But it was only needed because lenders WILL ALWAYS lend money to deadbeats.

It is a terrible law. It is another part of printing money and providing it to banks to lend out as a means of rescuing us from our debt bloated economy.

The only way to eliminate credit that has expanded to the point where no one can pay it back is an inflationary explosion and collapse of the currency, or bankruptcy and deflation. There is no other way out.

Want to blame one person for all of this - Alan Greenspan who should have strangled this cycle in its crib.

[KoRn]

Well, AFTER the law went into place, deadbeats got more loans, because it was more difficult to discharge debts in bankruptcy.

It was a horrible law, written by the big banks and credit card companies.

[ducttape45]

And don’t forget the school loan companies. Those can’t be discharged at all, almost, anymore.

[dfwgator]

Well, AFTER the law went into place, deadbeats got more loans

Because if they didn't, there would be cries of "Racism!".

[FReepaholic]

This was passed right in the midst of the real estate boom and I wondered at the time why they were doing it. Everything was going well, the economy was booming.

They knew it was going to blow so they were protecting the banksters.

[packrat35]

I agree. Really bought and paid for law from the CC companies and banks from Congress. I have watched as real people struggle while the banksters got off scot free.

[Liberty Valance]

I didn’t see it at the time but you’re right. The banks and CC Co’s knew exactly what they were doing. Dodd/Frank was the icing on the cake. It will take decades to recover ... if ever.

[Unknowing]

This BAPCPA law is a damned lousy pro-bankster crock of rotten disadvantages. It puts honest debtors seeking relief on a bell curve of earnings, and if their income is above average then they are forced into onerous Chapter 13 plans. Sixty percent of Chapter 13 plans fail, as if by design.

That being said, at least a third of all debtors suffer from consumer derangement syndrome, and they have unreasonable expectations about shedding liability for debts they willingly and knowingly accrued.