2005 bankruptcy laws helped fuel the forclosure wave

Discussion in 'Economy' started by Truthmatters, Jan 13, 2009.

  1. Truthmatters
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    Truthmatters BANNED

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    U.S. mortgage meltdown linked to 2005 bankruptcy law - Kansas City Star


    Before Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, households could erase their unsecured debts by filing for Chapter 7 liquidation. That freed up income that distressed homeowners could use to make mortgage payments.

    The new law, however, forced better-off households seeking bankruptcy protection to file under Chapter 13. That chapter requires homeowners to continue paying their unsecured lenders.

    In other words, say the Fed researchers, cash-strapped homeowners who might have saved their homes by filing Chapter 7 are now much more likely to face foreclosure.
     
    Last edited: Jan 13, 2009
  2. sealybobo
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    sealybobo Diamond Member

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    Excellent find Truthmatters.

    There are so many things the GOP did from 2000-2006 that caused the mess we are in. It is nice to see one I forgot about.

    I remember back in 2004-2006 I would hear weekly on NPR or Air America all the bad laws the GOP were passing. Tax breaks to companies going overseas, making it harder for average citizens to go bankrupt but making it easier for the rich to do it.

    Experts would warn what could/might happen because of these policies, and no one cared or believed. They told me I was just being a whiner.

    That's why I laugh when today they say it was Carter that caused this mess, or they suggest that they know how to clean up the mess they created.

    Just like you can't run government if you don't believe in government, you can't fix a problem if you don't believe there is a problem.
     
  3. editec
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    editec Mr. Forgot-it-All

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    Yup!

    And which well known DEMOCRAT was largely responsible for that law changing?
     
  4. Paulie
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    Paulie Platinum Member

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    Oh come on, don't knock her down like that Ed, she's in her glory!

    That's just cruel :lol:
     
  5. Ravi
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    Ravi Diamond Member

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    Chuck Grassley? Tom Delay? George W. Bush? Oh wait, they aren't Dems.
     
  6. Paulie
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    Paulie Platinum Member

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    Yeah, and Biden was probably a staunch opponent. :rolleyes:
     
  7. Ravi
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    Ravi Diamond Member

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    lol, I've never liked Biden's coziness with the credit industry. But this is really a Republican baby. Clinton actually vetoed it, IIRC, and the Repubs kept introducing it until they got it passed.
     
  8. jillian
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    jillian Princess Supporting Member

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    Actually this was one of the votes on which I disagreed with Biden. But his home state is Delaware...home of the banking industry. Not like he had a huge amount of choice.

    But it really was a repub travesty.
     
  9. Paulie
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    Paulie Platinum Member

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    No choice? His choices were clear. Protect debtors or protect bankers. He chose bankers to keep the campaign cash flowing. That shows how much he really cares about the middle class, huh?

    Just another typical politician. Nothing special about him, except now he's a heartbeat away from being the decider.
     
  10. Paulie
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    Paulie Platinum Member

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    The irony doesn't go unnoticed, though, when a democrat brings up a questionable bill wholly supported by the person they chose to be number 2.
     

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