Make Money Now!!! (Regarding new bankruptcy law)

[brokensymmetry]

It appears that the new bankruptcy law will soon be enacted. There is, I think, an issue we're missing.

Under Chapter 13, a court appointed trustee handles the collection of the debtor's money, and the distribution of whatever is collected to creditors. I believe they get 10% of the money for their services.

So, last year we had about 1.4 million bankruptcies, predominantly Chapter 7 discharge. Some of these will now be forced to follow the new rules, wherein they function under control of the trustee for 5 years.

Let's suppose that a mere half of these debtors are forced to file under the new rules. That means we'll have an additional 700,000 bankruptcy estates that will need to be administered. These will go through the pipeline, year by year, until we have some 3.5 million people under court supervision.

And who will function as bankruptcy trustees? Wealthy retired rethuglicans, perhaps? Or will it be something that will be handled by an established trust department - say, at a bank?

Not only is the new bankruptcy bill a grave injustice - it is, I suspect, a mechanism for vultures to feed upon the scraps of meat remaining upon the skeletons of the poor.

In short, the new bankruptcy law is a fast money scheme for the banks and insiders. A veritable honey pot.

Your comments?

[rzemanfl]

1. The trustees are lawyers who have to pass an FBI background

check. I believe the judges pick them. Nobody makes big money doing individual Chapter 13 cases.

[brokensymmetry]

5. Yes, but...

Suppose a lawyer specialized in them...automated as much as possible...hired some minimum wage part-time temporaries (God forbid that they provide employment benefits).

Couldn't they make a fair amount of money out of 1,000 or so cases...annually?

[rzemanfl]

6. It is still the law of small numbers. Lawyers are usually found

feeding happily where LARGE amounts of money are changing hands. There is too much busywork involved in administering these small consumer cases to make them extemely lucrative no matter how efficient a person got. Plus, many fail and the trustee is in court trying to get them dismissed for failure to make payments-which earns him nothing. One could make a living, they'd never get rich.

[Turbineguy]

2. Well, your assesment

is of a consequence that could be intended. After all, we may safely assume that if Bush favors it, somebody is about to get screwed.

But then what about all the lawyers that will go hungry from "tort reform"? Mabe this is where they may go.

[Squeech]

3. My father

worked for a company that went through bankruptcy, about 30 years ago. He said there were a few dozen lawyers who were friendly with the judges, and who always seemed to get the receivership jobs, and who always managed to do well out of the deal. They were referred to around the courthouse as "the Forty Thieves"-- though probably not to their faces.

Of course this is business bankruptcies, not individuals. But I bet the phenomenon is reproducible in smaller scale. It'll be like all those court-appointed lawyers in Texas who fell asleep while defending "murderers" that Dubya would later execute, and still drew their public-defender paychecks.

[rzemanfl]

8. The "smaller scale" is what makes it not reproducable. A lawyer

with one million dollar case makes a bunch. A lawyer with 100 ten thousand dollar cases doesn't, the total fees are the same, but they are one hundred times the work-although that is both an exaggeration and a generalization-but you get my point. It's the law of large numbers.

[NMDemDist2]

4. i thought the trustees were justice dept employees n/t

[rzemanfl]

7. Could be, I never saw their paychecks. n/t