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Bankruptcy Reform Act Finally Blows Sky High
Blog - Global Economic Trends ^ | 5/29/08 | Mish Shedlock

Posted on 05/30/2008 1:13:58 PM PDT by nicola_tesla

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The next bailout of the hapless consumer...at least this one will not be funded with taxes but will be funded by the rate you get on your next loan.
1 posted on 05/30/2008 1:13:58 PM PDT by nicola_tesla
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To: nicola_tesla
The next bailout of the hapless consumer...at least this one will not be funded with taxes but will be funded by the rate you get on your next loan.

Gee, I wonder what the "after bailout" rate will be?

Still another tax created by government....

2 posted on 05/30/2008 1:20:37 PM PDT by EGPWS (Trust in God, question everyone else)
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To: nicola_tesla

Bankruptcy law went from too easy to honestly a little too strict. This proposal (the HELOC thing) is just crazy though unless it means losing the house, which is what current law says.


3 posted on 05/30/2008 1:23:49 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: EGPWS

I’m thinking 70s - anywhere from 14-20%. I wonder what the credit cards will charge ?

If I had cc debt in this environment I’d pay it off asap.


4 posted on 05/30/2008 1:25:59 PM PDT by nicola_tesla ("Life is Tough... It's Worse When You're Stupid".... John Wayne)
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To: nicola_tesla
If I had cc debt in this environment I’d pay it off asap.

Why?

If one has CC debt in the first place without payment in backing, obviously thought and concern has already been lost.

5 posted on 05/30/2008 1:31:18 PM PDT by EGPWS (Trust in God, question everyone else)
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To: RockinRight

I have a good friend going thru a chapter 13 bankruptcy right now - price of diesel killed his business (trucking). Not much income, but he can’t sell his house either to get at the equity he has left, so he has to file a 13 to protect the equity he does have.

What a mess.


6 posted on 05/30/2008 1:33:14 PM PDT by nicola_tesla ("Life is Tough... It's Worse When You're Stupid".... John Wayne)
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To: EGPWS

What would “payment in backing” mean ?


7 posted on 05/30/2008 1:37:12 PM PDT by nicola_tesla ("Life is Tough... It's Worse When You're Stupid".... John Wayne)
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To: RockinRight
Bankruptcy law went from too easy to honestly a little too strict.

Yeah, now individuals are going to have to think for themselves, OH, THE HORRORS!

8 posted on 05/30/2008 1:39:28 PM PDT by EGPWS (Trust in God, question everyone else)
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To: nicola_tesla

This is just lien stripping under another name, which was allowed prior to bankruptcy reform. The primary lienholder holds the house as collateral. HELOC is a second, they wouldn’t get anything in the event of foreclosure anyway.


9 posted on 05/30/2008 1:41:56 PM PDT by RegulatorCountry
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To: EGPWS

First, I’ll say...”walk a mile in another man’s shoes.”

Secondly, my point is really this:

The law in effect now came at the same time banks started giving away loans to people that couldn’t pay them back...it seems odd that happened at the same time and now people really have no recourse. If someone can’t pay, THEY CAN’T PAY. You can’t “make” the money appear to pay a bill simply by strongarming someone who has a family to feed and take care of.

It was too easy before. It’s a bit too restrictive now...some of the calculations used are ridiculous. I can’t remember what they are, but something like saying you ought to be able to pay for shelter, food, fuel, clothing, necessities for a family of four on $800 a month and all that...just too crazy. I wouldn’t know as I haven’t personally seen what the numbers used are, it was on a thread a year or two ago.


10 posted on 05/30/2008 1:45:51 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: nicola_tesla

Some Freepers are quick to assume anyone with a bankruptcy, be it Chapter 13, 11, or 7, is a deadbeat. That’s not true at all.

Yes, SOME are. MOST are not. Things happen. People can do irresponsible things. People can also lose income, or lose jobs, or get sick, or be taken advantage of, a plethora of things.


11 posted on 05/30/2008 1:48:18 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: nicola_tesla

Some Freepers are quick to assume anyone with a bankruptcy, be it Chapter 13, 11, or 7, is a deadbeat. That’s not true at all.

Yes, SOME are. MOST are not. Things happen. People can do irresponsible things. People can also lose income, or lose jobs, or get sick, or be taken advantage of, a plethora of things.


12 posted on 05/30/2008 1:48:27 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: nicola_tesla
I’m thinking 70s - anywhere from 14-20%. I wonder what the credit cards will charge ?

Nah. A-rates will continue to be A-rates. Driven 99.5% by the Fed discount rate and/or Prime, and the rest by consumer demand. Nobody with a FICO over 680 will be affected. Subprime lending is already a dying institution, and this will be another nail in the coffin.

The B-paper folks will probably be paying a little bit of a premium, but not much. My guess is it will lead to more scrutiny by lenders at the underwriting level. Really, that's in the best long-term interests of everyone involved anyway.
13 posted on 05/30/2008 1:48:37 PM PDT by CowboyJay (There's always 2012...)
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To: RockinRight

How about the corporations bankruptcy, do the same rules apply. I doubt it. Let see how they treat the Airline industry.


14 posted on 05/30/2008 1:49:43 PM PDT by Orange1998
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To: Orange1998

Well...that’s actually my point...


15 posted on 05/30/2008 1:51:46 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: RockinRight
The law in effect now came at the same time banks started giving away loans to people that couldn’t pay them back...

Those hard working people should have been more thoughtful with their hard earned labor and made a personal decision for their own good before requiring someone else to make a law or decision for them.

16 posted on 05/30/2008 1:52:01 PM PDT by EGPWS (Trust in God, question everyone else)
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To: EGPWS

You’re right, but, last time I checked, a time machine hasn’t been invented.

One of my favorite sayings is: “Woulda, shoulda, coulda don’t mean sh*t.”

Bankruptcy has existed since the beginning - it’s in the Constitution. Not saying it should be easy to do or that you should be able to do it for any reason you feel like, but the Founders put it there.


17 posted on 05/30/2008 1:54:40 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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To: nicola_tesla

No such thing as liar’s loans ... it’s FRAUD clear and simple and should be fully prosecuted. Note that much of the paperwork was sent via hard copy, snail mail, via US Post Office. That adds the charge of mail fraud.


18 posted on 05/30/2008 2:05:26 PM PDT by taxcontrol
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To: RockinRight
“Woulda, shoulda, coulda don’t mean sh*t.”

Sure it does.

"Woulda, coulda, shoulda" by definition is a lack of "appropriate vision, not achieving via lack of vision and then reminiscing about one's blindness.

19 posted on 05/30/2008 2:06:10 PM PDT by EGPWS (Trust in God, question everyone else)
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To: EGPWS

Here’s what I mean by that statement.

If I come to you with a problem, and you say “you shoulda blah blah blah”...

I ALREADY KNOW WHAT I SHOULD HAVE DONE. I DIDN’T. NOW I HAVE A PROBLEM.

That’s all I mean. Telling someone what they SHOULD HAVE done doesn’t do a damn thing about their current situation, because, unless they’re a total moron, they already have figured out what they should have done.

That goes for finance, personal relationships, unprotected sex, you name it.


20 posted on 05/30/2008 2:11:15 PM PDT by RockinRight (Supreme Court Justice Fred Thompson. The next best place for Fred.)
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