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

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 ...


TOPICS: Business/Economy; Government; Politics/Elections
KEYWORDS: bankruptcy; billsigning; bush43
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To: Calpernia

Dang!


21 posted on 04/20/2005 1:39:12 PM PDT by Conspiracy Guy (Caution. Contents under pressure.)
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To: kms61

>>>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??


22 posted on 04/20/2005 1:39:51 PM PDT by sandbar
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To: Conspiracy Guy; All

Spot me $50,000


23 posted on 04/20/2005 1:40:00 PM PDT by KevinDavis (Let the meek inherit the Earth, the rest of us will explore the stars!)
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Comment #24 Removed by Moderator

Comment #25 Removed by Moderator

To: atrocitor

If every American would celebrate but cutting up all their credit cards, this would be fine...


26 posted on 04/20/2005 1:44:39 PM PDT by EternalVigilance ('Quality of life' is another name for the slippery slope into barbarism.)
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To: Conspiracy Guy
What a steaming pile that comment is. If you were ever forced to borrow money tell me the story.
Almost, here goes.
A very close friend of mine was doing well. Good job, appeared to manage his households finances well. One day he gets a "Thank You" letter from a Honda dealer in California for the three Honda's he had purchased last month. Only one problem, he has never been to California.
He begins investigating and found out that someone had stolen his identity. The culprit has never been found, and my friend would have never known had the bandit not made two mistakes. The first was making a salesman's day to the point that the guy (or girl) sent him a thank-you letter.
This had been going on for several three years. Credit cards maxed out, but the minimum payments had been made so no one came after him.
Now for the second - all important mistake. The culprit, somehow withdrew almost all of his 401K money. The IRS gets a little picky about that if you don't pay the early withdrawal penalty.
Long story short, when he put out the word that his identity had been compromised, the bandit cleaned out his retirement, getting the IRS into the picture. After is was all over with he ended up (from memory) nearly $750,000.00 in debt, with the IRS on his butt for the early withdrawal.
He made probably made enough to pay the minimum under the new law, but under the old law he got to keep his house, and the debt was gone. The IRS is still after him though.

I am sure this is not the norm, but it did happen.

GE
27 posted on 04/20/2005 1:47:28 PM PDT by GrandEagle
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To: Conspiracy Guy

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.


28 posted on 04/20/2005 1:50:33 PM PDT by atrocitor
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To: Dog Gone

Since they are now guarnteed their money by government; will the credit card companies be able to force people into bankrupcy?


29 posted on 04/20/2005 1:51:01 PM PDT by razorback-bert
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To: atrocitor
Contrary to the opinions of some others here - I tend to agree with you.

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.

30 posted on 04/20/2005 1:51:04 PM PDT by TheBattman (Islam (and liberals) and gasoline producers and sellers- the cult of Satan)
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To: GrandEagle
  Since this was a friend, you may not know all the details, but some things seem off there. How was the guy able to withdraw the 401(k) money? Couldn't he recover it from the bank / incestment center, as it was their error giving the money to the wrong person?

  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

31 posted on 04/20/2005 1:52:08 PM PDT by agarrett
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To: atrocitor

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.


32 posted on 04/20/2005 1:55:13 PM PDT by sandbar
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To: agarrett
That was my first response too. Here is what I was told when I asked the same questions.
As far as the folks at the 401(k) know they gave the money to him. The cars were purchased with new loans, again, he has to prove it was not him that borrowed the money. The credit card debt was all on new accounts that were opened by the bandit. As far as everyone knows it was he who borrowed the money.
Without catching the bad guy, he couldn't prove his innocence.

GE
33 posted on 04/20/2005 1:58:17 PM PDT by GrandEagle
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To: Conspiracy Guy

I'll gladly pay you Tuesday for a platinum card today.


34 posted on 04/20/2005 2:02:23 PM PDT by Rakkasan1 (The MRS wanted to go to an expensive place to eat so I took her to the gas station.)
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To: GrandEagle

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?


35 posted on 04/20/2005 2:03:44 PM PDT by TheBattman (Islam (and liberals) and gasoline producers and sellers- the cult of Satan)
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To: sandbar

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.


36 posted on 04/20/2005 2:04:53 PM PDT by atrocitor
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To: agarrett
Again, it was the credit card companies' error,
Oh, by the way, most likely if you have a credit card, you have agreed to an arbitration only clause.
With this clause, you agree that no matter what happens, you have relinquished your legal rights with regard to the creditor - even if it is intentional, willful, and deliberate. You have agreed that they can pick one of their cronies that you will pay to "arbitrate" the problem.
If I could get them to send me a million dollars and charge it to your account, you have agreed that you will be at their mercy.

Not really related to the discussion I know, but you are mistaken if you think their is any legal recourse except bankruptcy.

GE
37 posted on 04/20/2005 2:06:04 PM PDT by GrandEagle
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To: atrocitor

Am still waiting to hear about a bill that would also crackdown on businesses filing for bankruptcy.


38 posted on 04/20/2005 2:08:06 PM PDT by Bella_Bru (www.JewsforJudaism.org)
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To: TheBattman
I think the only answer is for the ISSUING agency to at least be sure who they are lending to.
Currently, If I could get a SSN of someone with good credit, I could have a new card with an unbelievable limit, with no one ever even seeing me.
I am not really sure how to implement something like this though.

GE

PS: He never recovered anything. This was about three years ago and he can't even buy a hamburger without cash.
39 posted on 04/20/2005 2:10:56 PM PDT by GrandEagle
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To: kms61

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.


40 posted on 04/20/2005 2:13:03 PM PDT by atrocitor
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