Posted on 04/20/2005 1:22:05 PM PDT by atrocitor
NEW YORK (CNN/Money) – President Bush on Wednesday signed into law a bankruptcy reform bill that will make it harder for individuals to clear their debts through bankruptcy.
So, experts say, if you were thinking about filing for bankruptcy, you might think twice -- or act twice as quickly, since major provisions of the law will go into effect six months from the day the law is signed.
(Excerpt) Read more at money.cnn.com ...
Dang!
>>>So when will interests rates come down and how much? /sarcasm.>>>
Exactly. This is great for the CC companies, let's see how long is takes for them to pass the savings on the consumer. Oh, what am I thinking??
Spot me $50,000
If every American would celebrate but cutting up all their credit cards, this would be fine...
What is with the straw man? I never said people were forced to take on debt or did not have to pay it back. What my comment was directed at was the CC lobby using the influence on the government to change the rules governing billions of pre-existing debt contracts in favor of one private party (lender) to the detriment of the other private party (borrower). If the new law only applied to prospective debt I would not have this issue.
The second part of my comment is to those people who are philosophically opposed to any kind of debt discharge or property exemption from creditors. If you count yourself there, great, your position is harmful to economy of the US.
Since they are now guarnteed their money by government; will the credit card companies be able to force people into bankrupcy?
I would not have such a problem with this new law if along with the new rules regarding the debtor had come new regulations on the Lenders Loan Sharks. The credit card industry is an unregulated mess of irresponsible practices, deception, and evil.
No one is holding a gun to our heads and forcing us to run up massive credit card debt. BUT - for many people, they learn after it's too late how dangerous credit card debt can be. To top it off, the credit card vendors legally hide the fact that you are at their mercy in every situation except for those who wisely pay off their full balance every month. Carry a balance and you are at their mercy. Have even a temporary setback due to health, emergency, job loss, etc. and you are toast. Late fees and jacked interest rates are automatic - even if you had a perfect payment record prior to the current situation.
The credit card industry is a trap. As other articles posted here and elsewhere have indicated, the highest profit comes from those who carry a large balance and are on the edge of bankruptcy.
You don't know what junk mail is until you find yourself in bad financial straights. The vultures actually double-up on the credit offers. And the REAL shock - the credit offers that pour in when a bankruptcy is finally discharged - geeze.....
I totally agree that Americans in particular need to gain control of their use of credit - but the credit issuing banks are not helping their own supposed problem.
Creditors are free to not issue credit cards to those who pose a risk of default - yet this is the favorite customer base for them to issue cards to. It's this same customer base that has accounted for the record PROFITS for the credit issuers. I really don't see how they are being hurt by the rising tide of bankruptcy. It's just a case of trying to squeeze every penny they can.
Now - the one way I agree that we need bankruptcy reform - I think the circumstances for granting a bankruptcy should be tightened. I have read on many occasions where an individual or family files Chapter 7, yet their assets outweigh their debt by a significant margin. How could this possibly qualify for Chapter 7? I personally agree that every debt that the debtor CAN repay, should be repaid. On the other hand, forcing a debtor into a destitute position that keeps them in a financial trap they cannot emerge from is not helpful to anyone.
I also am personally aware of people who have taken advantage of the bankruptcy code. People who literally emerge from bankruptcy (usually Ch. 7) and begin spending and running up debt. They build up debt until they reach the time window of legally filing again - and then do.
But this new legislation does little to really battle abuse - but it does squeeze every penny out of every debtor that can be squeezed.
For that matter, why did he need to declare bankruptcy to clear the debts? Again, it was the credit card companies' error, not his own debt. Couldn't he clear that?
Just if you know the answers, I'm curious.
Drew Garrett
Personally, I see this hurting the people more than helping. The companies are not going to pass the benefits down to the consumers and people who are in a bad shape medically are going to the be the ones to suffer the most.
I also wonder if the CORPORATIONS are going to be held to such stringent guidelines. Oddly, it seems to only affect people, not corporations. It makes me peek my head up at the 'corporate greed' I've been hearing about from Democrats about Republicans all these years. I'm a fairly new Republican, but I'm starting to wonder...
I am most dissapointed in my party at this stage. It would seem to me a more pressing problem would be the free health care that illegal aliens get, but citizens are going to be screwed under this law.
This just isn't about deadbeats who don't pay back credit card debt guys, this is very very dissapointing.
I'll gladly pay you Tuesday for a platinum card today.
That friend of yours obviously could document his problems - and none of them were his doing. If there were any justice in the world, he should not have had to endure a bankruptcy. It's far past time for some real legislation to protect consumers form Identity theft.
And I would imagine that your friend still has not recovered his retirement funds - so he actually had a major financial loss even though it was not his fault.
Are we suppose to buy some sort of insurance to protect our assets from ID theft?
I have to tell you that just because congress and the potus are doing bad things to Chapter 7 and Chapter 13, that is not a reason to also be doing bad things to Chapter 11. I do a lot of Chapter 11's, and make a lot of money from them, so frankly I may lack objectivity or perspective on this topic. However, as best I can tell, we use Chapter 11's preserve going concern value of business' rather than having them be liquidated, and having the going concern value lost, where possible. This preserves profitable business cores, reduces dislocation, and provides overall greater efficiency to the economy.
Am still waiting to hear about a bill that would also crackdown on businesses filing for bankruptcy.
You know that is one of the stupidest arguments have heard repeated by the bill supporters. There is nothing stopping a CC issuer right now from ratcheting up credit requirements and offering reduced rates (outside some short introductory offer that is not linked to credit worthiness anyway). I am not aware of any that do it, and they do not do it because the market forces do not reward them for it. People who use credit cards the wisest pay off the balance in full every month and do not incur interest. They are not who the cc companies profit from.
I have no problem with CC companies making money. Just don't use the government to reduce risk on billions of loans you already made.
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