House Passes Repubican Sponsored, Immoral Bankruptcy Bill

[Nbadan]

The worst part is, is when the housing collapse comes, many people are going to be stuck between a rock and a hard place. In many cases, owing tens of thousands more than their homes will be worth, unable to escape their homes or debts their MacMansions will become shameful mausoleums.

[The Ressurrected One]

Your on hallucinogenics if you think that credit card companies are going to lower their rates just because they can now legally take your house, tap your paycheck, take all your assets including your car, and force you to work for them until they see fit. They are more likely to increase rates.

They will for the customers they want. They'll have the freedom to be picky again and not have to give everyone credit on the assumption that a certain percentage will skip out anyway.

Besides, do you really think they want the houses, cars, and whatnot from the type of people that skip out on debt? I'm betting most of those assets aren't worth having and are more trouble to repossess than they are to just leave alone. On the other hand, you'd probably be right about garnishing wages...but, after all, it is their money you borrowed and didn't pay back.

I mean this in the kindest regard but, you're economically re ed.

[The Ressurrected One]

The worst part is, is when the housing collapse comes, many people are going to be stuck between a rock and a hard place. In many cases, owing tens of thousands more than their homes will be worth, unable to escape their homes or debts their MacMansions will become shameful mausoleums.

I get the sense you sit around with a ed pistol in your hand to commit suicide when the inevitable happens...are you always this doomy and gloomy?

[Nbadan]

I get the sense you sit around with a ed pistol in your hand to commit suicide when the inevitable happens...are you always this doomy and gloomy?

How Machiavellian your concern about my well being is, I’m sure.

[The Ressurrected One]

How Machiavellian your concern about my well being is, I’m sure.

Well, do you have a positive outlook on anything?

I mean, how economically sound is it for Big Corporation, Inc. and Mr. Filthy Rich to screw all the downtrodden out of their money? Supply and Demand is what drives this country...if you remove demand by breaking the masses, no one is going to need your supply and you join the soup line.

I don't see a problem with forcing some fiscal responsibility on Mr. Two-Car Garage on 27,000 a year with his plasma T.V., cell phone, X Box, etc....

[2centsworth]

And, if this law causes their losses to fall dramatically, the lenders will shift the savings to compe ive pricing and marketing. It's called free market capitalism. We all win...except the deadbeats and sloths, of course.

how is government intervention free market capitalism?

[Nbadan]

I mean, how economically sound is it for Big Corporation, Inc. and Mr. Filthy Rich to screw all the downtrodden out of their money? Supply and Demand is what drives this country...if you remove demand by breaking the masses, no one is going to need your supply and you join the soup line.

I don't see a problem with forcing some fiscal responsibility on Mr. Two-Car Garage on 27,000 a year with his plasma T.V., cell phone, X Box, etc....

Oh, the demand will still be there for the wealthy to make their money, only that demand will now be from India, China, and Indonesia.

[Nbadan]

Well, do you have a positive outlook on anything?

Yes, if you’re still reading this I urge you too take a few steps to protect yourselves and your families, but remember that opinions are worth what you pay for them.

1. Live within your means, spend only what you need to spend, pay off as many of your debts as quickly as possible without causing a serious financial hardship on your family.

2. If you’re planning to buy a < 150K house soon, or move up to yet a bigger house - wait. As many as 1/4 of the houses currently being sold in San Antonio and 1/3 of the homes being sold nationally, driving this housing bubble, are not first-owner homes, in other words, they are speculation by landlords. Many of these landlords are making less in rent than their monthly mortgages are worth and looking at their contributions into the homes as an investment to be cashed in when the home sells for a higher price. Trouble is, SA isn't a very wealthy city, and under Republican leadership there has been very little increase in real income - that's money that you and I take home.

So how is it that despite the fact that we are collectively making about the same as we were 5 years ago, and yet even people with questionable credit can afford to spend more on cars, large-screen TV, and also homes? Well, their homes which were once worth 75K are now worth 120k, and many owners do the sensible thing and cash out at these inflated values and buy homes worth $150k or 200k, and the Lexus, and the big screen TV's...and so on and so on and so on...

Trouble is, this unreal inflation in home prices gives people caught in this trap, a feeling of false wealth and infallibility. It is estimated that despite the obvious conclusion that interest rates have no-where to go but up, up to 30% of landlords invest in homes with little or no money down and with either adjustable rate mortgages, or even worse, interest-only loans. Even a 2% rise in these rates could force monthly mortgages rise dramatically, effectively forcing landlords to either dump the property at a huge loss if they have the equity, or surrender it to the mortgage companies which will sooner or later be forced to follow suit to unload the property.

3. Learn a valuable skill that can be bartered. If you know a lot about computers, learn to completely fix them. If you know a lot about cars, brush up on your skills. If you're good at home repair, electrical work, plumbing, or handy work, expand your knowledge.

4. Grow a garden. If worse comes to worse, at least you'll have a few potatoes and tomatoes to live on, plus you'll get the added tranquility of gardening as a side benefit.

Finally, If I’m wrong, I’m wrong, and you will be none the worse for taking my advice, but I don’t think I’m wrong.

[The Ressurrected One]

Okay, I've read the bill and some commentary on the subject...

Somewhere between 3 and 20 percent of the people who file for chapter 7 bankruptcy (total liquidation) each year would not be able to do so under this legislation. They would not pass the means test...which is those people who make above the state's median income and can pay $6,000 over five years (a hundred bucks a month) would be moved to Chapter 13 bankruptcy, or a repayment plan. To give you an idea, the median income for a four-person family in the state of Georgia is $62,294 a year. The rest of everybody else would be unaffected.

Just imagine this. If you make above the median income this horrible bill might actually require you to pay a few bucks a month to pay back the credit card companies you took money from. You have the goodies .. the big-screen televisions, the clothes, the jewelry, the cars .... the bling ... and now you want to stick the credit card company with the bill. Well aren't you special. The credit card companies are evil because they want you to abide by the terms of your contract with them, and you are pure because you want to bail out. Yeah ... makes sense to me.

There are about 1.6 million bankruptcies in this country a year. That's more bankruptcies per capita than during the Great Depression. Perhaps if people would save a little money instead of leveraging themselves up to their eyeballs just to amass as many toys as possible, there wouldn't be so many bankruptcies. But don't worry: the legislation doesn't take effect until 180 days after George Bush signs it.

It doesn't appear your dog food-eating grandmother would be affected.

[Clandestino]

basically don't run up credit card debt like a mofo and you will be alright.. like resurrected one says, "live within your means"

[spurster]

The issue is complicated except that asset protection trusts are still protected. This allows the wealthy to shelter any amount from bankruptcy. This bill provides a gaping loophole for the wealthy and doesn't impose any responsibility on creditors who promise quick money.

Should people be financially responsible? Yes, but make it for everybody.

[The Ressurrected One]

The issue is complicated except that asset protection trusts are still protected. This allows the wealthy to shelter any amount from bankruptcy. This bill provides a gaping loophole for the wealthy and doesn't impose any responsibility on creditors who promise quick money.

Always read the fine print...

Should people be financially responsible? Yes, but make it for everybody.

So, you advocate dropping the low income threshhold and push everyone to Chapter 13?

[spurster]

Bankruptcy is a recognition that the situation is hopeless, and that the best action for the debtors and creditors both is for the creditors to take their losses and the debtor to start over. This bill is about the fine line between hopeless situations and eventually it will all be paid (or some larger portion will be repaid). Not having gone through it and not having been employed anywhere close to the financial field, I don't know where that line is.

That this bill lets creditors off the hook for promoting large debts and the wealthy for their asset protection plans, that I understand.

[Nbadan]

the median income for a four-person family in the state of Georgia is $62,294 a year

Actually, $62,294 is a drop in median household incomes since 2002. Consider that the avg. national 4-person household income in 2002 was $62,732. Of course, these figures vary from state to state. A person making $60K+ could live quiet comfortably in SA where the average household income is closer to $39k. This means that people living in economically depressed area like SA will now be forced to pass a much tougher means test in order to qualify for Chapter 7 bankruptcy than people in other parts of the country. It's all a part of screwing the poor while allowing the rich to shelter their wealth from creditors with trusts and pensions.

[The Ressurrected One]

Actually, $62,294 is a drop in median household incomes since 2002. Consider that the avg. national 4-person household income in 2002 was $62,732. Of course, these figures vary from state to state. A person making $60K+ could live quiet comfortably in SA where the average household income is closer to $39k. This means that people living in economically depressed area like SA will now be forced to pass a much tougher means test in order to qualify for Chapter 7 bankruptcy than people in other parts of the country. It's all a part of screwing the poor while allowing the rich to shelter their wealth from creditors with trusts and pensions.

It was the example given in my resource material...I never suggested it represented the national median income.

[Nbadan]

It was the example given in my resource material...I never suggested it represented the national median income.

I understand, and I'm not against people having to accept some responsibility for the debts they have incurred. However, I prefer to leave that decision in the hands of a bankruptcy Judge rather than tie their hands with legislation written by the industry benifiting from it the most, all with no amendments by legislators which are supposed to be looking after the interests of its cons uents.

[2centsworth]

asset protection trusts

WTF? No such thing except some illegal crap some creepy lawyer is selling.

[The Ressurrected One]

WTF? No such thing except some illegal crap some creepy lawyer is selling.

I'm not a financial expert but, it's my understanding the only way to avoid paying taxes on income is to put it away in a tax deferred account or someplace where you're not using it.

Once you "unshelter" it, bammo -- it's taxed and exposed for judgement. Or, once you're dead...double bammo (well hopefully not anymore) -- it's death taxed and exposed for judgement. Sheltered money is stagnant money.

All other ways are, as 2cents said, illegal.

[Cant_Be_Faded]

I think credit card companies need to stop giving everybody, like those right out of college, such large credit lines. That is a problem.

But I think you should have to pay your debts.

exactly and exactly!!

They make paying off your debts such a big deal now, they hunt you down now, they make you seem like the bad guy....


But what party is it that spends millions on sending out application cards to every ing half wit teenager in america, the second they are of age? The credit card companies seek you out, present all this promise of free money to young kids who dont give a , and the government makes sure those kids stay in the dregs of society their entire life for mistakes they make when they're kids.

think about it.

19 years old --- officially too young to consume a liquid substance containing alcohol, not mature and responsible enough
BUT
more than responsible enough to fill out a form to receive a card that gives you credit for thousands of dollars, regardless if you have a job or not, regardless of your background, they jsut give it to you and know you're such a responsible teenager that you'll do well

yeah right, the entire concept is bull

government is so ing corrupt its insane

[Aggie Hoopsfan]

since Pensions and trusts can be sheltered by the wealthy.

There was a nice article in USA Today yesterday about one of those shelters getting nailed by the IRS. Nice try.

[JohnnyMarzetti]

[Aggie Hoopsfan]

Reading through it again, this cracks me up.

Moral of the story: live within your means.

[Clandestino]

exactly and exactly!!

They make paying off your debts such a big deal now, they hunt you down now, they make you seem like the bad guy....


But what party is it that spends millions on sending out application cards to every ing half wit teenager in america, the second they are of age? The credit card companies seek you out, present all this promise of free money to young kids who dont give a , and the government makes sure those kids stay in the dregs of society their entire life for mistakes they make when they're kids.

think about it.

19 years old --- officially too young to consume a liquid substance containing alcohol, not mature and responsible enough
BUT
more than responsible enough to fill out a form to receive a card that gives you credit for thousands of dollars, regardless if you have a job or not, regardless of your background, they jsut give it to you and know you're such a responsible teenager that you'll do well

yeah right, the entire concept is bull

government is so ing corrupt its insane

17 is young enough to die for your country... you should be able to have a credit card by then...

there is nothing wrong with credit card companies..no one is forced to get one.. my 50+ year old mother has never had one her entire life. she raised three kids alone on a teacher's salary...

[desflood]

Yeah, my parents just got their first, at the ages of 52 and 54.

[Nbadan]

There was a nice article in USA Today yesterday about one of those shelters getting nailed by the IRS. Nice try.

There are states where cheats like Ken Lay can plant their trusts and they can't be tapped for anything. One state I know is Utah and another is Montana, I think...