Posted on 04/08/2005 6:15:18 AM PDT by FlyLow
The era of happy borrowing is over. Americans might as well know it.
The death bell now tolls for low interest rates. And he, who doesn't hear that chime, can't miss the siren of bankruptcy reform. The federal bankruptcy bill, sure to become law, will turn many exuberant borrowers into lunch for debt collectors.
Fear does have its uses. If the sight of a tighter noose warns people away from piling up debt, all to the good. Americans will understand that credit cards are a potential enemy — and that even the friendly home mortgage can come back to haunt them.
The bankruptcy bill in a nutshell: If you get in over your head in debt, and still have a decent income, you can't wipe the slate clean with a Chapter 7 bankruptcy. Instead, you will be shunted into what's called Chapter 13. There, lawyers will find a way for you to pay back what you owe. That means you will write your creditors checks month after month and, if necessary, year after year.
To be honest, the bankruptcy bill leaves me with mixed emotions. The Puritan in me likes the part about personal responsibility. People who borrow have a moral duty to pay back their debt. And there are bad people who work the system. They do a Chapter 7 on Monday, then drive off in a new BMW Tuesday.
The liberal in me, however, thinks that the weak deserve protection. Many people fall into bankruptcy owing to medical bills or other bad luck. And the legislation does nothing to stop credit-card pushers from luring the innocent into obligations they barely understand.
(Excerpt) Read more at jewishworldreview.com ...
I am in the mortgage business. I see it all the time-what amazes me is that credit card companies will give unemployed high school and college students credit cards.
It used to be credit was too hard to get without a history-a vicious circle. This was bad in some ways and good in others. Now, even a corpse can get a credit card or a JD "Loan Shark" Byrider car loan.
Debt is a great evil. The worst curse--after war--inflicted on mankind is the concept of credit. If (and this is hard to imagine I know) the idea of lending money was never conceived, it would be a much happier world. As for the bankruptcy bill, I fear it simply strengthens the strong (banks, credit card companies) at the expense of the weak (debtors). It is odd that legislators who supposedly ask themselves WWJD vote for a bill HE would have detested. Still, if all this discourages borrowing, it's a real silver lining. In the immortal words of William S.: "Neither a borrower nor a lender be".
Utter rubbish.
No only will they give it to them, that's their number 1 target market right now! This bill is bad legislations! Responsibility works both ways! If banks are willing to give out money to anyone living or dead, they have to take the fallout of this, and that you are going to have a lot of folks default!
Instead they went to the Congress, paid them 25 Million (more in lobying than on any other bill in US history.. and everyone was jumping ugly over Soro's 25 Million) and bought themselves a law on the backs of americans.
Deadbeats aren't the issue, and neither are rich folks going chap 7 and driving off in their BMW... that's a lie, and the credit card companies know this... but they can sell that lie to the class envy american public... and the republicans are playing right along with the charade!
This is perverse and bad law, and shows the republicans in congress living up to every criticism of them putting busines above the national good and the people for a price.
When I was in college I was getting applications by the dozens. Never applied as I had no job or only worked during the summer. However, when I graduated and got a job with a very respectable salary, no one wanted to give me a credit card because I had no credit history.
"Utter rubbish."
Lemme guess. You're a loan officer for a finance company, right?
I looked at my credit report and was stunned to see how high my credit numbers were.
So I grabbed a card recently. I'm really not going to change my mode of living -- I buy what I can AFFORD, not what I will eventually be able to pay back -- but I like building my credit up for a mortgage someday soon.
Actually, if you must know, I'm a corporate spy in private practice.
Of course the borrower only wants to be told yes and if a no is the answer, then it must be our fault, not theirs, that their credit sucks beyond repair or you can't buy a $300,000 house on a $30,000 income.
I remember back in 1985, as a recent graduate making $25K per year and no debt other than a $2500 loan on a used car, I applied for a Visa and was rejected. I doubt that this would happen today.
American Express did issue me a card, but being young and innocent, I didn't know that you had to pay it off each month - but I must admit that got me into the good habit of doing that, and I've never held any credit card debt.
I'm all for personal responsibility, the free market and capitalism...but 25-30 points above prime? Give me a break! Plus all of the little billing cycle games they play to make you "behind".
(mysteriously stopped when we sent a couple of payments in via registered mail, return receipt!).
I'm afraid this is one of those things that could really come back to bite the GOP in the backside a couple of years from now.
I see all the time people with previous (usually chapter 7) bankruptcy. In 75% of the cases one or both of the following happened:
Medical Bills out of hand
Good people that just went too overboard (party due to easy access to credit partly due to irresponsibility)
Most of them are valiantly trying to do things right this time. Most people seem to rebuild a good credit history the second time around and learn from their first mistake.
The other 25% are either morons or were duped by an attorney into filing when they didn't really need to. These are the people likely to have another bankruptcy again at some point.
If your credit score is over 620 and you have SOME credit history recently (even just one credit card) you can usually qualify and usually at a decent interest rate (but maybe not the absolute lowest out there, but within a point).
I do and I do and I did.
There are loan programs for mortgages available to people one day discharged. I think that within reason this should be allowed but they should be stricter on debt-to-income (which they are not) and have a damn good reason for the bankruptcy. As you'd expect the interest rates are higher. I think one year out with re-established credit and a low debt ratio is a safer bet as far as an individual should be concerned.
Taking responsibility is a good idea for everyone, including -- arguably especially -- for the businesses that seek to profit from high risk loans. Let them take their share of responsibility for risk they sought.
He/she might be.
However, there's nothing wrong with using credit. Wisely. That's the problem...the "wisely" part of that statement is often ignored.
I can usually tell by looking at the credit report of someone who has had a bankruptcy whether or not they've "learned their lesson" or not.
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