The Bankruptcy Bill: Effects?

Discussion in 'Politics' started by Adam's Apple, Apr 8, 2005.

  1. Adam's Apple
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    Adam's Apple Senior Member

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    Scaring People Away from Debt
    By Froma Harrop, The Providence Journal
    April 8, 2005

    The era of happy borrowing is over. Americans might as well know it. The death bell now tolls for low interest rates. And he who doesn't hear that chime can't miss the siren of bankruptcy reform. The federal bankruptcy bill, sure to become law, will turn many exuberant borrowers into lunch for debt collectors.

    Fear does have its uses. If the sight of a tighter noose warns people away from piling up debt, all to the good. Americans will understand that credit cards are a potential enemy — and that even the friendly home mortgage can come back to haunt them.

    The bankruptcy bill in a nutshell: If you get in over your head in debt, and still have a decent income, you can't wipe the slate clean with a Chapter 7 bankruptcy. Instead, you will be shunted into what's called Chapter 13. There, lawyers will find a way for you to pay back what you owe. That means you will write your creditors checks month after month and, if necessary, year after year.

    For full article
    http://www.jewishworldreview.com/0405/harrop040805.php3
     
  2. Mr. P
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    Mr. P Senior Member

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    Well, unless they changed the Chapter 13 payout and I don't think they did, it's not eternity, it's 5 years max.

    On the other hand..this new bill if signed by Bush will be a disaster.
     
  3. Adam's Apple
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    Adam's Apple Senior Member

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    How would holding people responsible for their rightful debts be a disaster?
     
  4. Mr. P
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    Mr. P Senior Member

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    I didn't say it would be. This bill will be..perhaps Ms. K will give us her story again..she was lucky, but is very typical of those that need relief.

    Then there is the question of whether a credit card Company should be responsable for bad business practices..what a concept, huh?
    First thing that comes to mind is, credit cards issued to college freshmen without income. Seems odd doesn't it? They just have to send in the form...good business practice? I don't think so. Should the credit card company take the hit for bad business decision or practice? Bet your ass they should.
     
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  5. Adam's Apple
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    Adam's Apple Senior Member

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    Good point there. My youngest daughter was 14 years old when she started getting information from the credit card companies, and a few of her friends (guys and gals) were constantly on the run from collection agencies when they were young. The worst offender was the daughter of one of our well-known professors on campus. She was a credit card shopaholic and knew she had no way of paying for the purchases she made. Maybe this bankruptcy bill will force parents to be more concerned and involved in what their kids are doing if their kids' feet start getting held to the fire for debts they ring up.

    It's just not right for people to keep making purchases that they have no way to pay for. The seller just passes his loss onto his other customers, and we all end up paying for these debts in the end.
     
  6. Mr. P
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    Mr. P Senior Member

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    I agree with that...but something the public doesn't know is, many, many, people are not abusers..Like Ms. Ks' example..These and the young kids are those who this will hurt..not the true abusers. The abusers will find another way to work the system.
     
  7. 5stringJeff
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    5stringJeff Senior Member

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    Frankly, I think it's good that peopl eare made to pay their debts. This bill will (or should) force a major shift in American's spending habits.
     
  8. William Joyce
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    William Joyce Chemotherapy for PC

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    I agree. The problem with easy bankruptcy is that those costs are borne by everyone, even in a free market. If the credit card company knows that X percent of their debt will be discharged, that means higher rates for those who DO pay their debt. Same for other situations. I don't doubt that the credit people have lots of power and can finagle themselves, but look, we're all grownups here. You know what you're getting into. It's not a big secret: you borrow, you gotta pay it back. With interest. I know that A LOT of bankruptcies are nearly fraudulent. People lie about their assets.

    And, Americans need to save more. I should talk.
     
  9. Mr. P
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    Mr. P Senior Member

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    I can't take issue with any of that William. My main grip is the
    Credit card companies have enlisted the Government to solve what is really
    bad business practice (See my example, on college kids, above).
     
  10. Yurt
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    Yurt Gold Member

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    Actually, the government created the bankruptcy haven in the first place. Before this, you were thrown in prison (again government) or the bank just took it all. I do not agree with this bill, but I have not read over it much so can not offer an indepth opinion, however, the creditors had to go to the government because the government created the first bankruptcy legislation to begin with.
     

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