So, what happens now when people can't pay their bills?

[MoonRiver]

If they don't have the ability to pay off creditors and can't declare bankruptcy, I anticipate only two scenarios. We will either bring back debtors prisons or corporations will have to write off the debts. Considering that we're practically back to the dark ages, I anticipate the former. The fact that incarcerated moms and dads will be leaving countless children peniless and effectively orphaned, or that fresh faced teenagers, new to the world of college and personal finance, find their lives ruined, will be irrelevant. All that will be important is that the almighty corporation's will be done. Oh, wait, it already is.

[aquart]

1. They'll commit suicide.

Which is what desperate people do when they don't see any way out.

[elehhhhna]

6. more homeless, crime, family violence, etc. then suicide.

[KansDem]

70. But only in "those communites..."

not set off with fences, gates, and one of those little houses guards sit in...

edited to add photo:

You know, one of these things! I can't remember what they're called!

[notadmblnd]

103. Somehow I don't think they'll be safe in their gated communities

desperate people do desperate things.

[Trajan]

2. I heard yesterday ...

Debt, even old debt, can be bought and sold as a commodity ...

The buyer would have an interest in turning the thumbscrews on those who believe their old debts are uncollectable ...

[MoonRiver]

8. Yeah, but what can they do if the people have no money?

I don't see the profit margin here.

[datasuspect]

38. garnish your wages

if a person manages to get a job.

indentured servitude for debt maybe?

[Just Me]

48. "Indentured servitude for debt"

I believe your characterization is spot on!!!

,...unfortunately,...

[durablend]

139. "Required military servitude"

See my post (#138)

I'm surprised none of us saw it coming.

[Nordmadr]

141. I mentioned something along this line in another thread.

It seems to me that a logical next step would be debt forgiveness or payoff for people willing to serve militarily.

As bad as this is, it may work to the advantage of prgressives, liberals, dems, etc. At some point the public will reach a tipping point where they actually realize how screwed they are getting. The republicans will then be thoroughly screwed. For now, just democracy is royally screwed. If it can't be altered in the political landscape, it will be altered by the masses. People can only take so much repression.

Olaf

[acmejack]

12. There has been a commercial trade in debt for...

Many years. There are a raft of businesses that buy bad debts very cheaply from lenders and then attempt to negotiate a settlement with the debtor. I don't know how lucrative it is, but the practice is very common.

[Richard D]

63. It's very profitable

Usually it's ten cents on the dollar or less. It gives the debtor who knows this a great advantage in bargaining. Sometimes as low as 15 cents on the dollar is possible. Lower if the purchaser of the debt thinks that the best they can do is break even.

[ultraist]

69. That's right, it is very profitable

Companies or individuals buy unpaid notes (loans on property or cash loans) for a very small percentage of what's actually due, then they go after the debtor and collect the full amount due with excessive fees and interest.

This is not new.

[kristndem]

150. I know they can do this,

But how are they doing it legally? If the original creditor has written the debt off and the debtor has entered into no agreement with the purchaser of the debt, how is this done?

[sui generis]

16. statute of limitations applies to "old" debt

with the exception of government guaranteed (i.e., student loans, federal back taxes & penalties) debt.

[ultraist]

71. Are you sure? A creditor can re-report the debt for as long as they wish

They can report the debt to your credit report for as long as they wish, I believe.

I do think that suing someone and getting a judgment against someone or a lien on their property, has time limits.

[Ms. Clio]

74. Yep, in Texas, at least, the statute of limitations is four years

Someone tried to collect from me on a debt from 7 years ago (I disputed it then, and the original creditor dropped it) and they never called me again after I told them I knew the law.

[ultraist]

78. Sounds like those laws may vary state to state

But medical bills probably don't have statute of limitations.

Collections are different from reporting to one's credit though. Different laws apply to making a report and actively seeking collections.

Judgements and liens are yet another way to collect and that is done through the civil courts.

[Ms. Clio]

79. My understanding, after researching this when it happened

Is that these debt-buyers count on people not knowing their rights under the law, so they harass and browbeat and threaten. And that these laws do indeed vary from state to state.

I was threatened with a lawsuit in their form letter, but if it had ever actually gone to trial, it would have been dismissed because of the statute of limitations.

Now if they had secured a judgment before the statute had run, I am sure it would have been quite different.

I don't think they can keep reporting a debt that is not legally owed? That's interesting, I will have to look that up, now!

[ultraist]

82. I need to look up my state laws too!

This has raised several questions for me that I don't have the answers to. It's stupid of me not to know, creditors often make fake bad reports to your credit. We had this happen once and took quite a lot to undo it. Thieving greedy bastards!

[Ms. Clio]

90. Yes, and it strikes me that it's been a while

since I looked at my credit reports--that bogus debt better not still be there.

[Walt Starr]

101. Nope, hopsitals are treated as normal creditors

Only federally guaranteed student loans are not subject to statutes of limitations.

[Digit]

127. Student loans are ones which follow you, or so it seems.

I don't have any, but in my experience, you can not get from under those.

[tjwash]

96. It's seven years for a debt...

...but if they have a judgment in court against you, that is good for ten years, and can be renewed by filing with the assessor, so that is a case where there is not a real statute of limitations.

[Walt Starr]

99. Actually it varies state by state and by type of debt

See the link in post 97. It lays it all out state by state.

[Walt Starr]

97. Direct link to state by state statutes of limitation on debt

http://www.cardreport.com/laws/statute-of-limitations.html

Don't be fooled, if a collection agency attempts to collect a debt incurred in a state that is older than the statute of limitations in that state, laugh in their face.

[Xithras]

105. Those limitations only apply to lawsuits.

Potential creditors only have X years to sue you for past debts, but they can still attempt to collect on the debts by other means forever (except for a few states that specifically address debt collection limits). They can send you nasty letters, call you on the phone, call your employers, and do all the other nasty things that creditors tend to try to collect their money, and there are no federal (and few state) laws that can be used to stop them.

[Ms. Clio]

108. Well, after I demonstrated that I knew the law in this case

I never heard another peep from them.

[Ms. Clio]

107. That's exactly what I did

I said maybe up there in Minnesota you aren't aware that the statute of limitations in Texas is four years.

It was sweet.

[Xithras]

104. No debt can be reported in the US after 7 years, but it CAN be collected

Here's a simple example: If you borrow $3,000 from my company and then vanish for 10 years, there is legally nothing stopping me from sending you letters and attempting to collect on it 10 years later. Except for a few states that have enacted limits, most debt is legally valid FOREVER. In almost all of the states, court judgements, signed by a legal judge, remain in force until they are waived by another judge, so you can get nailed by a debt whether it's 5 years old or 50. I can even list the debt on your credit report for up to 7 years, but only for seven years.

The source of the confusion on this comes from the Federal Fair Credit Reporting Act. The FCRA says quite plainly that debt can only be listed in your credit reports for seven years, irregardless of whether it was actually collected or not. To get even more specific, the FTC has ruled that the seven year timer begins on the day that the debt went overdue, NOT the day they put it into collections or from the last time the file was updated (as some CRA's will attempt to claim). Even making payments on debt already listed in collections doesn't reset the clock. And if the debt is resold from one creditor to another? The seven year clock still starts from the day the debt went overdue with the original creditor.

Those debts don't simply vanish after 7 years and are still legal and collectable, but they cannot be reported to potential creditors and cannot be used against you once that time limit has expired.

[radwriter0555]

3. OFF to the gulags with them!

It's that compassionate conservatism!

[lonestarnot]

18. Gulag Archipelago!

[gumby]

4. The Personal Responsibility Police

will take everything you own; your house, car and all your possessions.

Rather than prison, you will be thrown on the street with just the clothes on your back.

[ultraist]

73. They will also take your children if you cannot provide for them

Or, if you don't pay child support, they throw you in jail.

They are talking about setting up more institutions for children after decades of research showing that institutional settings for children are not healthy. They are gearing up to steal more children from parents who cannot provide for their kids. I'll see if I can find the article I read on this.

[guinivere]

5. No bankruptcy and no rise in minimum wage

mean debtors prison or some sort of work off your debts labor.

[sui generis]

welcome guinivere!

actually, combining no caps on interest rates with this legislation means that the credit card companies will just keep you paying minimum payments forever.

Remember that they may renegotiate your debt or interest rate through consumer credit counseling, but the end result is that they intend to make your debt seem "affordable" so long as they get a regular payment on it.

The insidious part is that if the debt never reduces you will actually have paid it back many times over, if ever, and when you die they'll attach your estate in probate.

They'll "work with you" to make it seem like they're being reasonable but actually the best advice is to avoid any expense that requires credit that can't be paid off completely within a couple of paycheck cycles anyway.

[Disfronted]

34. But people making minimum wage are exempt from the bill

I don't understand how this will make it harder for people making minimum wage

[Jacobin]

41. True to an extent

They will still be able to file Chapter 7, but the process will be more expensive because of the new law and they will have to find a lawyer willing to personally certify that their schedules (list of assets and liabilities) are correct, something which most lawyers will be loathe to do. How can a lawyer certify as to what a client owns? They could own stuff in another state and without searching the records of every courthouse in every state, you wouldn't know. Or a brokerage account? How would you find that out.

So, yes, they will still be able to file Chapter 7, but its going to be a bit difficult.

[Disfronted]

46. I missed bit

I did not read where the bill now requires a lawyer to certify assets, even for the very poor?

That is insane. Can you provide a link to that?

[Jacobin]

50. Hang on. I'll dig it up

Here is a link describing some of the other bad aspects (pdf, sorry)
http://www.abiworld.org/pdfs/LawProfsLetter.pdf


Here is the link to the attorney certification issue:

http://www.bankruptcyfinder.com/bankruptcyreformnews.html
March 3 2005

ABA TO SUBMIT AMENDMENTS

Senator Jeff Bingaman of New Mexico has agreed to sponsor the ABA amendments on attorney liability for the accuracy of schedules and for requiring the attorney to certify the ability of the debtor to make the required payments on a reaffirmation agreement.

Senator Feingold has agreed to sponsor an ABA amendment on Debt Relief Agencies.

This amendment did not pass, so its still in there

[WilmywoodNCparalegal]

7. A good question

I'm tinkering with the idea of filing bankruptcy now, before this bill becomes law, and tell the credit card companies to go to hell. Either way, my credit is trashed, so what do I have to lose?

You know, people bitch and moan about a national ID, but in reality we already have a sort of national ID: our credit report and social security number. They control our lives in many more ways than we think. Credit reports are so geared in favor of the credit bureaus and credit companies that they make it very difficult to correct mistakes or dispute information. I know; I have tried and it's been the most frustrating process.

I hate this type of society, where a poor slob who lost a job, has gotten sick or has suffered through a divorce will be judged by a credit report instead of his/her moral worth.

[Mandate My Ass]

15. Damn straight

Having bad credit these days almost insures you will be preventd from re-entering the economic mainstream and sends you into a death spiral from which you can never escape.

The viciousness of this bill is breathtaking.

[Disfronted]

35. If bad credit ruins your life, how do this bill change that?

This bill affects how much (if anything) must be paid after bankruptcy, not the affect bankruptcy has on your credit score.

[Jacobin]

47. It affects it this way:

Say you own a business that is not incorporated and have bank loans say supplying WalMart with widgets. Say Wal-Mart starts buying their stuff overseas and cancels your contract and you owe the bank half a million bucks along with payroll, building, etc.

You can't sell the business and the bank sues you for the loan. Under the current law, you can file a Chapter 7, have the debts discharged (of course they will take your non-exempt property) and get a fresh start.

In a couple of months you will get flooded with unsolicited secured credit card offers. You find employment elsewhere. Put up $500, get a secured credit card and pay it punctually for 18 months. Your credit score starts going back up and you will be able to get a car or house loan, if your income supports it.

Under the new law, you would be forced into a Chapter 13 and have to live on the IRS standards for subsistence and give the rest of your paycheck to a trustee to pay off all or part of your debt for FIVE YEARS. No allowance for a broken transmission or a leaky roof or an uninsured medical expense. If you don't follow the plan for the five year period, your case is dismissed, you dont' get a discharge and creditors can start garnishing your wages and seizing your assets. You can't get out. Its a permanent trap. You can't rebuild your credit.

THAT my friend, is why this thing is so bad.

[Disfronted]

51. But if you are unemployed at the time of bankruptcy...

Can can still discharge all the debt same as before

[Jacobin]

52. The 'means test' has income requirements

I've seen several versions of the time period for your income to be low enough to qualify for Chapter 7.

But, yes, if you are broke for the requisite period of time (and lose your house and car, etc, and I guess live on the street or with relatives), you can file Chapter 7. I don't remember if they look at the last 18 months income or the last 6 months.

[TankLV]

125. Donald Trump - poster boy for corporate "responsibility" must have his own

laws that apply only to him.

This guy is the biggest deadbeat I know of, and he STILL gets new loans and investors.

I would think this idiot would be at the head of the line of people going to debtors' prisons!

How does he get away with it, and more importantly, why do idiots still do business with him?

Thief and scoundrel. And now he has his own TV show. Figures.

[acmejack]

130. Many employers now check your credit

prior to making a job offer! Bad credit can/will effectively render one unemployable for many decent jobs...

[CindyDale]

9. Middle class are the debtors

They will probably escape the U.S., which will ensure its economic destruction and destabilize it.

[Tansy_Gold]

95. Escaping the U.S.

this is looking more and more and more attractive to hubby and me. Refinance the mortgage and get every penny in equity out of the house, take the money, and run.

Today's fun experience with American financial institution: A truck payment check lost in the mail or at the bank where the truck was financed is going to cost us $100 -- $30 to stop payment on check, $20 returned check fee when original check reaches loan holder, $20 late fee, and since this was a pay-off check, an additional $28 in unexpected accrued interest. Oh, and did I mention that the same financial institution holds the loan and our checking account???That's why the banks and credit card companies NEED the bankruptcy bill: they aren't getting enough for nothing.

[CindyDale]

117. That's terrible.

I would not want to stay with that bank. I had a lost check a few years ago, but because of the circumstances, the bank waived the stop payment fee.

[AnnInLa]

10. Debtors prisons

I was reading a blog this morning, and it mentioned that the founding fathers were very set against debtors prisons, as they had witnessed their abuses in England. It said they had written it into the Constitution that there would be no debtors prisons in the country. I don't feel like doing a search of this....does anyone know?

[AnnInLa]

11. Also, Freeps have mixed feelings about bankruptcy bill

http://www.freerepublic.com/focus/f-news/1358749/posts

[Jacobin]

20. Interesting comments over there....

A lot of them sort of see the problems with the bill, but the ones who do are misinformed about the extent of the problem. One poster said that the bill 'closed the loophole on million dollar home exemptions' which it clearly did NOT. Talking a lot about individuals filing Chapter "11" which is not what typically happens...individuals are chapter 7 or 13 except on rare occassions.

First time I've been to that hellhole in a long time and its pretty weird to see them actually face (at least to some extent) with nervousness, what their party is doing...you can tell some of them are in a tight spot and its dawning on them that this law is about to get up close and personal with them....no more yammering from afar about 'personal responsibility' with the attitude that nothing bad can ever happen to them.

[Yosie]

13. Hungry young lawyers

(like the old OEO Poverty Lawyers) will take these cases "to get experience" and "ego satisfaction" (it's a "high" to whip a big bank's butt :) )-- and challenge each and every over limit fee, and each and every late charge and each every usurious interest charge -- over hundreds of simultaneous suits. It will so tie up the banks in litigation -- that they will better off under the old law.

[MoonRiver]

17. Interesting concept. I just hope the lawyers work pro bono or commission.

Poor people being hounded by creditors won't be able to pay big legal fees.

[Yosie]

27. They will be doing it pro bono

That's the way the 1970's era suits against CITI were done.

[MoonRiver]

68. Great!

:thumbsup: Maybe there's a thread of hope for the little guy left.

[confludemocrat]

14. Indentured servitude

will come into being again, passed under a bill with a name like the "Good Consumer Credit Facilitation Act" or some other Orwellian name. Hourly work in the service of the debt by the debtor at minimum wage levels will be sold in an exchange among the top userers. They will be relocated at will or will wear tracking bracelets.

[Love Bug]

19. They will garnish your wages and leave you nothing

[Jacobin]

21. Some states don't allow wage garnishments

Florida and Texas don't........

But you are right, that's what they will do where they can.

[MoonRiver]

23. If this happens, and I have no reason to believe it won't,

the rate of homeless children will skyrocket. Les Miserables R US.

[Mandate My Ass]

24. That's OK, they'll take your retirement money then

That's what a repuke senator said yesterday. Why should deadbeats be allowed to keep the only income they're likely to see in their old age if they've deliberately screwed the struggling credit card company?

[Jacobin]

58. Fortunately, IRAs, Keoghs, 401(k)s and such are exempt

from seizure.

[prolesunited]

59. You sure they still are under this new measure

I've heard otherwise. Proof either way would be appreciated.

[raccoon]

65. Good gosh, can you provide a link? nt

[Bouncy Ball]

22. "But they'll go to debtor's prisons and some would rather die!"

"If they would rather die, . . . they had better do it, and decrease the surplus population." Stave 1, pg. 63

--Scrooge, the hero of the 21st century republican party A Christmas Carol

[HockeyMom]

25. My daughter

Was diagnosed with Bipolar a few years ago. She has been in and out of hospitals, out of work for long periods, and racked up a lot of debt. It took several years to get to the exact dosage of medication where she was able to fully function and go back to work. She will be on these meds for the rest of her life. Even now her employer put her back part time just to see how well she would be able to do her job. On her part time salary, her meds ($150 a week) WITH insurance account for half her salary. There is a garnishee on her salary too with other creditors waiting in the wings. She is still living with me because she cannot afford to live on her own.

Please tell me WHERE these creditors THINK they will be able to get any more money from her? Take MORE of her salary? Then she won't be able to afford even her meds. They do that and she will be right back in the the hospital (creating MORE debt), have NO JOB, and they will get NOTHING AT ALL. Or perhaps, as somebody said, bring back debtors prisons? Put her in PRISON? My daughter was told that she could collect Social Security if she is unable to work. Ah, but even that now on the chopping block. Would the creditors go after her Social Security check too? I suppose those Bush supporters would just say she was "lazy" and didn't want to work. I just hope none of them ever have to stop their own child from slitting their wrists.

Welcome to the Bush "Ownership" Society. The man can throw out all his cutesy words, but I for one can read between the lines. What they want is not an ownership society, but a society of BARONS and SERFS. If you are not a member of this elite class, then screw you.

Damn, WHY can't the American people wake up and comprehend all the double talk going on here. Karl Rove, Herman Goebbels would be proud of you. That's all I have to say.

[cally]

36. I'm sorry about your daughter

I believe the new law takes effect in six months. If she needs to declare bankruptcy then she should do it now. I hope her situation improves.

[AngryOldDem]

26. You'll see more homeless

Shelters will, in effect, become your debtor's prisons, because, with no means available to get their lives back on track, most people will be there until they die. The implications of this, especially for children of bankrupt parents who find themselves in this situation, are very frightening.

[doodadem]

29. Homeless shelters???

Aren't shelters and housing for the poor one of the big items cut in the new Bush budget? I predict you are going to see a HUGE upswing in crime rates--not only theft, as people try to survive, but violent crime as people are stressed beyond belief. Along with suicides.
We received a letter a few days ago from Bank One in response to our complaint that they had recently DOUBLED our percentage rate, even though we had never missed a payment or been late. Their response was that with the Chase merger, they had sent out notices that people could "opt out", and they hadn't received one back from us. Now it's too late. What kind of option is that? Either pay off your balance totally, or we're going to double your rate. I admit, we've been carrying a big balance. It comes from seeing a 6-figure income go to practically nothing when Bush took office originally. I hold him directly responsible for what has happened to the economy in this country, and how it affected my business.
We've been trying to pay this card down, but now, the extra money we'd have to put toward the principle will just go for their "minimum payment". I've sent complaints to everyone I can think of, and pretty much gotten the response that banks can do whatever they want.
Is this the American Dream???

[Disfronted]

33. Ok, how will this increase the number of homeless?

Ok, how will this increase the number of homeless?

Considering:

1) Anyone making less than the median income can still wipe out all debts
2) Anyone making more than the median income, while they will be financially squeezed to pay back debt, will be allowed living expenses when working out a repayment plan

The bill is the worst kind of corporate welfare, but I don't see the connection you make.

[AngryOldDem]

40. Sorry I posted

Just based on what I see -- people working, trying to pay huge rents because they can't get anywhere else to live that is cheaper, making barely minimum wage at their jobs (and having hours cut besides), having health issues, either with themselves and their kids. Most of these people are carrying debt from when they were "better off" -- just dealt with a credit card issue for one such person that has been going on for years. The credit card company finally agreed to take a **very** small amount (a couple hundred dollars on a debt that was over a grand) as final payment. Woman couldn't even make that.

It doesn't take much to lose what little you already have. Companies calling in debts will push many out onto the streets. But I may be wrong. Hope I am.

[Disfronted]

43. middle class gets screwed, not the poor

Well, I hope you are wrong as well. And I hope by some miracle this bill gets bogged down in committee.

But here is the key:

"people working, trying to pay huge rents because they can't get anywhere else to live that is cheaper, making barely minimum wage at their jobs"

But people making minimum wage will still be able to wipe out their debts as before. This bill will not affect them one way or another.

It is the middle class who are screwed here, not the poor.

[ultraist]

80. 1.5 million people fell into poverty last year alone

Those on the bottom rung of the middle class 36k and below are slipping into the low income rung and many are falling off that bottom rung into poverty.

As the poverty rate has INCREASED under Bush, the homeless rate has INCREASED under Bush. This is based on stats. Find the stats if you don't believe it.

This bill will push lower middle people into poverty and possibly put them on the streets.

Middle class income is 36k-89k with the median at 43k

Furthermore, as the rental market gets flooded with people who have lost their homes, the rent rates increase, pushing the lower income renters onto the streets.

There are a number of ways this will adversly affect the lower income and those in poverty.

[ultraist]

77. People earning under 43k can opt out of the new bill?

Do you have a link? I thought only those that make min wage could opt out. Min wage is NOT 43k a year.

[Disfronted]

109. People making less than the median state income are not affected

http://news.yahoo.com/news?tmpl=story&u=/ap/20050309/ap_on_go_co/bankruptcy_16

"Those with insufficient assets or income could still file a Chapter 7 bankruptcy, which if approved by a judge erases debts entirely after certain assets are forfeited. But those with income above the state's median income who can pay at least $6,000 over five years — $100 a month — would be forced into Chapter 13, where a judge would then order a repayment plan."

[Ivan Sputnik]

28. They'll take a cut of whatever income debtors earn in the future.

Maybe even anything they earn above subsistence level. Welcome to the New Feudalism.

[elehhhhna]

30. Welcome to the exploding growth of the underground economy.

[datasuspect]

57. get off the grid

cash jobs, nuff said . . .

[Fescue4u]

91. You just described a CH.13

Which is limited to 5 years.

So for most, there is an eventually end to it all.

But the problem is that not all filers will qualify for ch.13

Those who don't qualify for a ch.13 and cant file a ch.7 will be in a world of neverending hurt.

[Disfronted]

31. Uh, anyone can still declare bankruptcy...

This bill does not prevent anyone from declaring bankruptcy. It simply says people who earn more than the median income must work out a payment plan instead of having all the debts erased.*

This does mean that at least the most vulnerable (ie in California people making less than $50,000 a year) will still be able to wipe out their debts same as before. This bill really screws the middle class more than anyone, since the rich can always shield their assets if need be.

*The above does not mean I support this horrible bill, but we need to at least get the facts straight.

[Jacobin]

53. Here's what makes it impractical if not impossible

In the new Chapter 13, you have to pay all your disposable income to a trustee for FIVE YEARS. During that time you cannot incur debt and you must live on the IRS standards for subsistence income. There is no provision for a medical expense that's unexpected or a broken transmission or other emergency. If you don't follow the plan and have an unexpected expense not provided for in the plan, your case is dismissed and you don't get a discharge. Then the creditors can start garnishing your wages and seizing your assets.

So TECHNICALLY you are right. You CAN still file a Chapter 13, but even under current Chapter 13s which are three years mostly, most don't work because of the above, and so the case is converted to chapter 7 and you get a discharge. No more.

Its one of those cases of it being correct on the surface, but a big lie when you look into it deeper. Typical Republican bill-writing.....Kinda like the "Patriot Act" or "Clean Skies Iniative
"

[ultraist]

85. Anyone making MEDIAN income or MINIMUM WAGE?

You've used those terms interchangeably which is very inaccurate.

[Disfronted]

111. No I have not

Anyone making below the states median income is exempt.

http://news.yahoo.com/news?tmpl=story&u=/ap/20050309/ap_on_go_co/bankruptcy_16

" Those with insufficient assets or income could still file a Chapter 7 bankruptcy, which if approved by a judge erases debts entirely after certain assets are forfeited. But those with income above the state's median income who can pay at least $6,000 over five years — $100 a month — would be forced into Chapter 13, where a judge would then order a repayment plan."

[Skittles]

136. lol - IF APPROVED BY A JUDGE

no doubt a bush appointee

[Disfronted]

142. Chapter 7 has always required approval by a judge n/t

[Skittles]

148. yes, but this bill will allow those judges to work even harder

for the corporations

Boy, you sure are working overtime defending that piece of shit bill.

[Disfronted]

151. I am not defending the bill. The bill is terrible.

I am not defending the bill. The bill is terrible.

But we need to keep our facts straight while bashing it. The bill is horrible because it will prevent many people in the middle class from escaping debt (which is often due to medical reasons, not spendthriftness). Every thinking American agrees on that.

Someone here posting that the bill will (for example) prevent those making minimum wage from declaring chapter 7 is no better than a Freeper declaring this bill will keep millionaires from escaping liability through homestead exemptions. Both are factually wrong.

And there is no need for us to confuse the facts. The Freeper must have the facts confused or he/she will have to admit the bill is wrong. We can keep our facts straight and still bash the bill on its merits, which it richly deserves.

[Fescue4u]

88. Not necessarily.

The bill limits ch.7 filers by the a means test.

That leave ch.13. But there are certain situation where you cannot file a ch.13, especially if you unsecured debts exceed a certain amount.

Some debtors (albeit a small %) will most definitely be in a situation through which no BK chapter is available to them.

[ultraist]

93. ok, thanks, I need to look at the means test,

It's likely based on someone's PREVIOUS 18 month income. So someone who lost their 36k job and has no income canNOT file even though they are now poor. So it does affect the poor, unlike the claim some other poster has been making. It affects the lower income and poor in other ways too.

[Disfronted]

110. Really I did not know that

Can you provide a link please? I've heard of people discharging millions through bankruptcy

[Fescue4u]

113. You CAN discharge millions in a ch.7

But not a ch.13

This bill limits most debtors to a ch.13

However a ch.13 is not available to you if you have more than about $290k in unsecured debt.

Ironically, this portion of ch.13 law was designed to keep people from "taking advantage of the ch.13 to avoid a ch. 7"

So, if you owe more than $290k unsecured, and make more than $50k, you are truly screwed as no bk chapter is available to you.



"Only an individual with regular income who owes, on the date you file the petition, less than $290,525 in unsecured debt and $871,550 in secured debts "

http://www.bklaw.com/chapter13doc.htm

[Disfronted]

152. Did they even read the bill before passing it?

The more I learn the more astounded I become

[clem_c_rock]

32. Watch how high the suicide and homeless rates start going up.

[FooDog]

37. Personal Responsibility...any statistics?

I had a long discussion about this new bankruptcy bill with my wife this morning. Socially, she's very liberal, but when it comes to finances, she tends to be conservative. Basically, she's a big Dave Ramsey fan. Anyway, her major point was basically the idea of Personal Responsibility, and she had some pretty good points. Yes, Credit card companies are evil, but there *seem* to be a lot of people in this country that use credit cards to live beyond their means...buying things that they don't need. Big TV's, electronics, computers, whatever. Her point was not that people were abusing the bankruptcy laws, but that they are spending stupidly, piling up mounds of debt for things that are not essentials, and then walking away from it via bankruptcies, which result in higher prices for the rest of us as stores attempt to cover their losses.

Before you get the wrong impression of my wife, :), she definitely agrees with he fact that exceptions need to be made for people with medical illnesses and such.

I found it difficult to argue against her point because I do see a LOT of people buying things that they really can't afford and don't need. Has anyone done some sort of study about the rise of debt in our country? *Is* it the fact that people want more and more things and aren't willing to wait for them or is that just how it seems?

[MissB]

39. Someone get this guy's wife the link

to the recent study that showed that most bankruptcies were due to medical illness and that a majority of them were *not* due to frivilous spending.

Oh, and there are no exceptions for medical illnesses in this Republican bankruptcy bill.

Personal responsibility, my ass.

[MoonRiver]

81. Especially when you consider the fact that we have no national health care

and, as a result, so many are uninsured. Illness and accident happen. This has nothing to do with personal choice, unless the illness and accident occur through drug or alcohol abuse, etc. Even so, drug and alcohol abuse are illnesses which could have been treated IF this stupid country offered free health care. :mad:

[midnight armadillo]

42. She's wrong about the bankruptcies

Your wife is mistaken about who files for bankruptcy. 50% are those in massive debt due to medical bills, and most of the rest are in debt due to job loss, divorse, or other major life disruptions.

There are very, very few who voluntarily choose bankruptcy because of flagrant consumption. Most are forced into it because they can't pay living expenses anymore and have no other choice. Seriously, who wants the social stigma of going bankrupt? I don't know how many people in dire straits (illness, job loss etc) get really careful about spending their money, but bankruptcy is intended as a way out of what is otherwise a total dead end. Why should someone with a string of bad luck (say: lose job, spouse gets cancer, car accident...) be punished for the rest of their LIVES by overwhelming debt for it?

Now, I won't argue that financing a highly consumptive lifestyle on unsecured credit is the new American Dream. Most of those just manage to keep their minimum payments going and keep on consuming. They don't want to file for bankruptcy and lose their credit cards! If this were truly a problem for credit card companies, then they would stop mailing out billions of credit card solicitations every year.

[MissB]

44. I'm sure there are other links to the Harvard study, but here is a thread

where we discussed the study.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1204917#1206590

[FooDog]

56. Thanks!

I had come across this link AFTER I posted....of course. :)

[Mandate My Ass]

45. Read Elizabeth Warren's report to Congress

She blows all those myths about high living right out of the water. Abuse rates are somewhere between 3-5% and there are already remedies in place for those who try to abuse the system. Most people declaring bankruptcy have lost everything and declare as a last resort after having gone hungry, skipped needed medical attention and after one or several utitlities have been shut off.

By all accounting by that time they have paid off the principal credit card debt along with some interest.

What *seems* to be so is not what is. Medical bankruptcies have gone up 2200% (no that's not a typo) in the last 20 years and three quarters of them have health insurance. These people are blameless.

Even the all-powerful Dave Ramsey can't help someone who has lost everything through no fault of their own.

Pass it along. :)

[FooDog]

55. Seems

What *seems* to be so is not what is.

Yeah, hence the reason for my query. I see a lot of people spending frivoulously, but that could just be that I notice it more.

[Mandate My Ass]

60. You said you wanted stats. Now you offer anecdotal evidence

of what you allegedly see. If there's confusion it's because you're not willing to see the truth about the documented circumstances that lead to declarations of bankruptcy because it interferes with what you perceive as frivolous spending.

[Heddi]

87. what is "friviolous spending" to you, and how many people share their

personal financial info with you for you to know how much they make each month vs. how much they spend each month vs. how much debt they owe?

I mean, my mom and I are close, but *I* don't even know what her financial situation is---most people tend to keep that stuff, you know, private.

BUt aside from that---what do you consider "Frivilous spending"?

Unless you are PERSONALLY INVOLVED and know INTIMATELY about someone's personal financial situation, you have NO idea what they spend 'friviously' and what they spend fiscially.

Perhaps people buy clothes, but don't go otu to dinner. Perhaps someone spends more on eating out than they do on groceries, but only because they're not a good cook, or that they don't like to eat in.

Me thinks your wife has been watching too many Dr Phil shows with the "Worst Case Scenario" folks on there who ARE $400,000 in debt because they bought too many snowboards or added too many house additions.

THE REALITY is that most people are in bankrupcy because of medical bills. Those that AREN'T bankrupt because of medical bills are bankrupt because one or both income earners lost a job and either is still unemployed, or is underemployed and making a fraction of what they previously earned.

Now, you're not saying that someone who's in debt w/mortgage because they used to have a $150k a year job, got fired, and now works for $9.00 an hour is 'spending friviously' by buying things like clothes, christmas presents, etc, are you?

People have a right to live a normal life, even if the shithole companies that employ us do their best to make our lives miserable. It's even MORE imperative when people have children added to the mix---growing children CONSTANTLY need clothes, shoes, food, medical, books, etc.

Again--I think your wife has an unrealistic idea of the REALITY of folks who are in bankrupcy or considering bankrupcy. Not everyone is a Dr Phil family. Not everyone is stupid when it comes to money. Not everyone loads up on lavish goods outside their means.

You can only be 'personally responsible' to a certain degree. I'm in no way responsible for being laid off. I'm in no way responsible for having unemployment run out and not able to pay my bills other than rack up credit card debt. I'm in no way responsible for getting a catastrophic illness that depletes savings. I'm in no way responsible for a spouse that dies.

To suggest that personal responsibility is THE ONE AND ONLY KEY to fiscal affluence is COMPLETELY missing the reality of a VERY LARGE PORTION of Americans and the situations they have found themselves in over the past 4 years.

[PassingFair]

116. Don't forget the entrepreneur who has financed

his/her business on credit cards. Why not? The interest rates were often LOWER than a bank loan, and you didn't have to qualify.
Who wouldn't use the credit card like the "revolving" credit it is/was?
Now, times are LEAN and they're scraping to pay the minimums and hoping business picks up. This bill is SSOOOOOOOO BAD.
I work with lots of small businesses. LOTS of them are sole proprietors or LLCs, etc. This is gonna kill 'em, and their families will go down with them.

[Lydia Leftcoast]

118. That was me

I couldn't get a loan to start a translation business, because the banks didn't understand it. "You're going to make money off that? Are there enough customers in town?" "Well, it's a worldwide market?" "You're going to serve a worldwide market?" etc.

[PassingFair]

119. You and me and

many, many, many others....

[earth mom]

126. FYI- "Personal Responsibility" is a FREEPER term. eom

[nashville_brook]

154. dave ramsey is a christian fascist

his personal responsibilitiy propaganda is a bunch of bunk.

if you want to cut up your credit cards and get a cheap used car -- fine -- do you need this witless fool yelling at you for 3 hours a day?

[datasuspect]

49. "personal responsibility" is a conservative meme

and it is propaganda pure and simple.

even if bankruptcy is based on frivolous spending, so what?

does ANYBODY ever raise their sword of morality when major businesses do this? when they declare bankruptcy because the ceo engaged in malfeasance?

nope, they reserve their chiding moralizing for the little person with no power . . .

[raccoon]

66. Amen to that

when's the last time you heard "personal responsibility" applied to Kenny Lay and others like him?

[MoonRiver]

67. Exactly! And that's what our new oligarcy, former democracy,

is all about. WAKE UP AMERICA!

[walldude]

83. Yeah, where the hell was all this personal

responsibility when the Savings and Loans crashed. Gee I bet ole' Neil Bush really had to pay out of his pocket when he drove Silverado under...

[BuelahWitch]

94. And no one is less "personally responsible" than W

Their Chosen one

[ultraist]

98. exactly! when 30% of the population is at risk for falling into POVERTY

it's clear that these people are NOT MAKING ENOUGH MONEY. It's not that they are mismanaging their money.

Nearly half of the population earns under 43k! Do these people who buy into the RW talking points stop and THINK about what a family living on less than the median have to live like? Many cannot afford healthcare for themselves or their children. That's why 45 million Americans are without healthcare!

[Digit]

128. I am unemployed through no fault of my own.

I can't even get a friggin interview!
I am great on the computer, and over 50 and once they can tell kinda how old I am...that is it. They consider me ready for the landfill.
I refuse to live on the streets.
You know what is sad? There are people on her in worse shape than I am.

[acmejack]

133. Ditto. Unemployable...

I am in the exact same boat as Digit. Terminated from a good tech job as soon as my FMLA ran out & now I can't even get a menial job at a grocery store. I have given up on even getting a real job again. Don't get sick or you are screwed, instead of dying (hey, after being told you were terminal & you recover instead, it's all good) you become a poverty stricken unemployed person who has lost everything (car, home, stock options). If not for my family...

[elehhhhna]

143. Term. after FML:A ran out? You should have been put on LT disablility

What's up with that?

[elehhhhna]

144. digit; does your resume look 50? let's fix it!

Time to play hide the age clues & drop everything pre-1990.

pm me if necessary--

[CornField]

64. One more thing

Let's say a family has stupidly spent itself into debt with credit cards and is trying to dig its way back out. During the course of paying off the debt, an accident happens or someone gets sick and has to spend time in the hospital. Even though the family has insurance, there are deductibles which must be paid out of pocket.

When that medical debt hits their credit reports, the credit card companies view the family as higher risk and raise their interest rates. (Making it even more difficult to pay down the debt.)

The family is then convinced by the hospital that the only way to keep the medical debt out of a collection agency is to charge the full amount on one of their credit cards. This takes that card to its credit limit. Again, the credit card companies see this on the credit reports and relate it to higher risks. The interest rates rise again.

These larger interest rates and much ballooned balance have added a strain to the family budget. A couple of the cards are paid late... interest rates rise and overdue charges are added to the balance.

Eventually, the higher interest rates and overdue charges take their toll and extend the cards over their limits. Again the interest rates rise and now an "over limit" fee is added to the late payment fee. How does one pay off a $5,000 at 30% interest when $50 is being added to the balance each month because of being over the limit?

It isn't just the actions of credit card companies to get customers, but their actions in relation to existing customers which should be brought to light.

[Skittles]

137. stop using "conservative" to describe fiscal responsibility

Dems balanced the budget - bush has created deficits as far as the eye can see.

And your sympathy for evil credit card corporations who PREY on people is absolutely appalling.

[BiggJawn]

54. Ever read Dickens?

"God bless us, Every one!" Said Tiny Tim.

Debtor's Prisons, Poorhouses, kids selling their private parts in the streets to wealthy ReTHUGlicans, air so thick with shit you can't see the Sun, and a mistaken idea about "The Empire"...

[lovuian]

61. What about taking your money across the border

can you protect in there???

[Fescue4u]

92. NO. Not legally anyway

But if you are looking at a bk, you proably don't have any money other than your current income stream.

[ultraist]

102. Well, that's not totally true. There are offshore accounts and ways

to hide and protect your money whether or not you are filing for bankruptcy.

[Fescue4u]

112. Yes and its illegal to do so.

Whether you can get away with it is different from legality.

When you file, you must disclose all assets, doesnt matter where they are.

Sure you can perjur yourself and not disclose them, but its a federal crime and if the assets significant, you'll go to prison.

[adigal]

62. Lots of freepers nervous about the effect on '06

so we need to play this up, loud and clear.

[maveric]

72. "Its their own fault if they overextend themselves! The govt shouldnt ..."

have to bail them out if they are too stupid to not handle their money in a proper manner. A lack of financial responsibility, careless spending. They deserve to be on the streets!"

Thats what a repug hack that I work with told me.

But its OK for corporations to carelessly make bad decisions/investments and the govt will bail them out?

[alfredo]

75. Now we know what bush's "Ownership Society" really means

Do I want to be owned by Citi Bank, or MNBA?

[ultraist]

84. LOL! That's exactly what "ownership society" means!

The peons are OWNED by big corps.

[Ms. Clio]

76. "Are there no workhouses?"

Coming to a city near you.

[derby378]

86. Seen those annoying Matthew Lesko ads?

If his books are any good, Lesko may attain godlike status.

[Fescue4u]

89. They just won't pay them.

The reality is that the banks will not be able to collect much more than they do now.

If you cant pay..then you cant pay.

But this bill will allows banks to essentially keep you in a state of financial ruin indefinitely...whereas previously BK allowed you to escape that and rebuild.

Most people think of BK as THE END...as in financial ruin.

Thats not true. BK is a new beginning.

BK filers generally have been in a condiition of financial ruin for a few years. filing BK ends that situation and allows one to rebuild.

At least thats the way it used to be.

[notadmblnd]

100. My guess is that they'll be shipped off to one of those labor camps

to work off their debt. People of all walks of life will be totally enslaved.

[No scull and bonzer]

124. I think you could be right.

They did not build them to just sit empty! They will be worked to death and their organs harvested. Then into the furnace. Those bankster gangsters will get their pound of flesh.

[Cocoa]

106. they get drafted

[applegrove]

114. You get drafted.

[AgadorSparticus]

122. oh shit! i didn't think of this....and very possible, too...

:scared::scared:

[durablend]

138. I think we also got the answer to the "draft" question!

No need for a draft! All these "deadbeats" who file for BK (especially the ones without current incomes) will be forced to enlist to pay off their debts! Gets rid of the "draft" issue and plays RIGHT INTO the RW's "personal responsibility" meme which the brainwashed sheeple will eat right up :scared:

Anyone checked the PNAC playbook to see if there's a mention (if not an entire chapter)?

BE AFRAID...BE VERY AFRAID! :scared:

[MoonRiver]

156. Yes, but that would be preferable to a draft which conscripts people

against their wills. There are different degrees of evil. :scared:

[lonestarnot]

115. They steal lots of IDENTITIES! n/t

[Lydia Leftcoast]

120. What happens in Japan, where loan sharking is legal and

personal bankruptcy is, for all practical purposes, impossible:

1) People commit suicide

2) People disappear voluntarily and start a new life in the underground economy of a new city.

For a fictional treatment of this problem, read Miyuki Miyabe's All She Was Worth, a novel originally written in Japanese and translated into English (not by me, though) a few years ago.

[Rex]

121. We will all be assimilated into the Bush Collective

It is the goal of all capitalist RW swine - destroy the middle class. They've hated it since FDR brought America back from the brink of financial ruin. What will be left over is cheap labor, kinda like in other countries that we outsource to now. They will find a way to make us slaves to the credit/debt system as the federal infrastructure collapses. The price of goods will skyrocket and the dollar will be worthless. Houses will have to be mortgaged and property taxes will rise as less money goes into the public school system. With less education and options open to them, the youth of today will sign up with a military branch in with hopes of going to college. The rich will get richer and the poor will get poorer.

My 2 cents.

[he lied us into war]

123. We already have debtor prisons

Tax obligations cannot be cancelled thru bankruptcy so tax debtors are told to pay up or go to the can. In fact even if they pay up, they may still go to prison.

[Kurovski]

129. More crime, more abortions, more divorce, stress-related disease,

drug and alcohol abuse and broken families with psychologically damaged children.

Hip-fucking-hooray for the "family values" Repubelickens and their "president".

edit: Oh, and the same cheer goes out to the bought and paid for Democrats who gave the thumbs up to institutionilised poverty.

For every family that goes down in poverty when a member becomes sick
and the family drowns in debt, we'll all be sure say a special prayer for Joe Biden and the rest.

[Pepperbelly]

131. I do not believe that the bill actually prevents bankruptcy so ...

much as assigning a means test to determine under which rules it will proceed ...Chapter 7 vs Chapter 13.

[notadmblnd]

132. There is already a means test

When filing bankruptpcy you have to list FMV for all your assets (everything you own) cloth, furnature, jewlery etc.. and you have to list all of your debts, how much it cost to put food on your family, how much money you spend for gas to go to work. If a person has more than 200.00 left over at the end of the month, then you are not allowed to file chapter 7. You must file chapter 13 and pay back your debt.

I have seen nothing in the bill that would make it harder for corporations to file. They're the abusers. Look at MCI Enron donald Trump etc.

[Pepperbelly]

134. Oh, I'm not defending it ...

just noting that it does not preclude filing so much as making
Chap 7's more difficult.

[elehhhhna]

145. You can always work those numbers--the court's pretty generous.

The FMV you ention means "what's it worth at a garage sale?" which puts a nice sofa at 100.00. Cable, DSL, no problem. The means test in the new bill for Chapter 7 vs. 13 is your state's median income--most states in the low 40's.

[countryjake]

135. They join the rest of us "under the bridges"!

It's already been brought up that company towns aren't such a bad idea; can't remember who was promoting them, but it was late last year, on the Sunday morning news programs. Picture Walmart employees..."Wallyville...the village that raises its children, one big happy family...we take care of our own".

Seriously, have you looked under a bridge lately? Equal opportunity homelessness!

[Don1]

140. Fascist State Imminent

The next thing you know, all those people with debt and no job(s) will join the military. Some loans can be deferred from military service. And, of course, it is better monetarily than no job at all. It will be the only way some people can keep themselves out of the debtors' prison. And of course the poor who join the military will look to the government as their savior.

[leftofthedial]

146. every non-voter and repuke voter who can't pay their bills get exactly

what they deserve--they lose everything.

every non-repuke voter gets screwed.

[Heidi]

147. Ah, it'll be OK . . .

because gays still can't get married, theocracy is on the march and God has a plan. <Sarcasm.>

[demnan]

149. My brother, I'm ashamed to say, is a deadbeat Dad

Under Clinton there was a program to collect from deadbeat Dads. My brother was a cab driver, when he wouldn't pay the bills or negotiate a settlement with the state, which had provided welfare to wife #1, they took away his driver's license. Now my brother lives at home off his 83 year old mother and does not work so he has no money. What they did was assume this man wanted to work.

I brought this up to show how they plan to collect their debts. They will cut off any means of being able to work if you don't allow your wages to be garnished to pay your debts. Watch for stuff like this to happen in the future.

[porphyrian]

153. You owe your soul to the company store. - n/t

[Deja Q]

155. If that's the case, I pray that our border countries will open up for

political asylum.