President signs bankruptcy bill

CNN/Money ^ | April 20, 2005: 3:24 PM EDT | Jeanne Sahadi

[Conspiracy Guy]

If you have a pancake on your head you need to be armed. That is my Ruger P97DC in .45 ACP one of many many cherished friends.

[TheForceOfOne]

I have two credit cards and I will have them payed of by July.

If you barrow, pay it back. They fact credit card companies are predators is beside the point, you chose to enter into the agreement.

The way I look at it is credit cards, which you can obtain from retailers, banks, or credit card companies are investments to them and you are the stock which they wish to receive a return profit from. The best of both worlds sort of because they also set the rate of return on their investment, I wish I could do that.

The best stock to buy in their eyes is the ones that are late, over the limit, etc. which gives them the right to ask for higher returns.

Those who pay off their debts every month, or hold high credit rating are bad investments for them even though they give you preference in purchasing items, they only get the market rate return kind of like a money market stock, safe but at a low rate of return profit.

Don't let others live on your dime, pay off those credit cards then take the money and invest it in something that will pay you a return. Be smart with your money.

[atrocitor]

Under the new law there is almost zero judicial discretion, if a debtor is above the IRS median income statistic they have to do a Ch 13. In my experience any middle class household with two full time working adults will exceed this number. The $100 a month affordability standard is a misnomer because it is not based on actual expenses of the debtor but rather on another IRS expense statistic that in my experience does not reflect people's actual living expenses, particularly housing in light of the recent housing boom (bubble). These people are the ones heading for Ch 13.

A single lower middle class wage earner would likely still be able to file a 7.

I do not think I am putting too much weight on these dual wage earning middle class families being forced into Ch 13.

[atrocitor]

If someone incurs debt they have to pay it back or they will be relieved, voluntarily or involuntarily, of every non-exempt asset they have. That has been the law and as far as I am concerned that is how it should be. I do not understand why voicing opposition to this crappy new law would make anyone think that I would think that debtors should not have to pay back these debts with every non exempt asset they have.

My problem with the new law is that 1) the state is changing the rules that govern billions of dollars worth of pre-existing debt contracts in favor of one private contracting party to the detriment of the other private contracting party; and 2) effectively breaks the American consumer bankruptcy system which will lead to inefficiency in the American economy.

[antceecee]

I guess we shouldn't hold our breath...
Unfortunate that creditors can exact usurious interest rates, change the conditions of your contract after the fact, use your problem with another creditor (even if you are not at fault - guilty til proven innocent) to treble interest rates....
I do believe people need to repay their debts, but I also believe that there needs to be some consumer protection. And how 'bout they quit mailing us the dozen to 20 odd credit offers a week that jam up our mail. Not to mention the 'checks' we don't want - same checks that are dangerous in the hands of an identity theif.

[Zeroisanumber]

I think that there neded to be some kind of bankruptcy reform to make it harder for welschers to get away with theft, but I wish that they had included legislation capping interest rates.

[RFEngineer]

Thank you for your responses....very informative. We've proven that this topic can be discussed rationally by folks with some level of disagreement - no small feat!

[atrocitor]

The current law already had provisions to render debt permanent if the borrower committed fraud or theft (sec.'s 523(a)(2) and (4)).

Frankly, I don't care if states want to allow usurious interest rates or not. I am more in the let buyer beware camp on that one. But when you do not have an effective consumer bankrupty system in place you create inefficient dislocations in the economy, and that is against all our self-interest and I have a problem with that.

[Robert_Paulson2]

yes

[Robert_Paulson2]

The balance of the cases I see arise from the following in descending order: divorce, illness, injury, lay off and entrepreneurial failure.

---

Speaks volumes.

As do the comments from others repeatedly asserting 'credit card abuse is the problem,' or 'irresponsible freeloaders who refuse to pay their agreed upon debts.'

My only guess is that such comments are eminating from from folks who are reflecting the abuses and excesses THEY have engaged in, regarding THEIR OWN tendency to use credit fraudulently.

That, and a lack of experience with an unexpected job loss, bout with cancer, or disabling accident caused by a drunken and uninsured motorist OR some similar unanticable situation is the ONLY thing that will open their eyes... One cannot save enough money, or buy enough insurances to cover for every type of potential disaster.

When the individuals who sneeringly and smugly erupt with a 'pay your bills deadbeat' comment on threads such as these, I can only imagine what events in THEIR lives will be used, to teach them the lessons that YOU have learned from working in the field.

They won't get it, until THEIR kid comes down with some dread disease, that bankrupts them and destroys their wage earning potentials. Then, they will sound like you. Until then, I suspect, you are wasting your breath explaining it to them. To them it's all about abusing credit cards, with an intent to commit fraud. To you, it's about preserving economic viability and the macro economic advantages of giving the hopeless a new lease on life, financially speaking.

What do you think, debtors prisons reinstated in our lifetimes? I wonder...

[antceecee]

LOL... great use of pancake!!!!!

[antceecee]

" I don't think that the law should be used to cover them for deliberately making bad loans."
I agree with this and especially in regard to the outlandish credit being offered to college kids. Thank heaven my kid is living at home while going to local college, she gets at least ten offers a week for up to $2500 credit lines, no way she makes enough to be given this kind of credit. Luckily I have her trained to toss these in the 'shredder' box.

[antceecee]

point made was kids entering college... by the time they leave college the credit card companies hope to have them hooked big time.... If you don't see this as a scam, there is no hope convincing you....

[GrandEagle]

Thanks, I thought I was alone in opinion...

Cordially,
GE

[Conspiracy Guy]

It is our job as parents to stop the kid from being stupid! Quit the victim routine. Listen to yourself.

Gotta head home.

[antceecee]

It is really scary when you think how many young people have no guidance. Will we be creating a problem of debtors with the next generation? This needs to be addressed. Many families have little knowledge of finances. Many work paycheck to paycheck. The attitude here is scr@w'em if they don't understand what they are getting into. I think this takes advantage of uneducated folks.
... and where are the mandatory interest rate decreases? Seems nothing is done to rein in the usury being practiced by these large credit issuers.

[antceecee]

What about kids with bad parents, divorced parents absorbed with their lives... yes they will be victims. Everyone is not BLESSED with your perfect life.

-drive safely home-

[Conspiracy Guy]

My life hasn't been perfect. My ex and I were divorced when the kids were 12 and 10. But we worked together to raise them. Financial issues were one of the many things.

It is not society's place to cover bad financial decisions!

That sounds so, "It takes a Village".

[antceecee]

hey Guy.... don't go puttin' no Hillary hex on me!!!
: )

[GrandEagle]

It is really scary when you think how many young people have no guidance.
It is sad. I'll have to admit that there is a fine line here though. I firmly believe that "loopholes" and such that allow people to take advantage of the bankruptcy laws to defraud lending institutions should be closed. However, when those institutions make available what could be two and three years salary to kids that don't even have a job, I have a real problem using the law to protect them.
We can teach and impart knowledge to our children about financial responsibility, but they still have no understanding what it means to be twice your annual salary in debt.
As I unsuccessfully pointed out earlier, that is why, as a society, we impart responsibility on our children in stages, as they mature, for example, driving, or in Alabama, carrying a concealed weapon (min age 25), the list goes on.

Cordially,
GE