Unlimited protection for your house in some states(bankruptcy)

[ribrepin]

Something my son just pointed out to me about the brand new bankruptcy piece of crap.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 would limit who could qualify for bankruptcy under Chapter 7, which permits filers to erase debts after forfeiting their assets. The bill would:

Limit homestead exemptions to $125,000 if the debtor bought the residence within 40 months of filing. However, Florida, Iowa, Kansas, South Dakota and Texas have unlimited homestead exemptions that would protect expensive homes from creditors.

Surprise, surprise.

http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=bankrupt11&date=20050311&query=125%2C000+homestead

[Warpy]

1. $125,000 won't buy a garden shed in most big cities

and it won't buy a garage in most medium sized cities.

Just WHERE do these dumb fucks get these numbers?

[ribrepin]

2. I live a medium sized city and 125,000 won't even buy a small condo

I think it's very handy that Florida, Iowa, Kansas, South Dakota and Texas have unlimited homestead exemptions. That way next time Ken Lay files for bankruptcy, he be able to keep his mansion.

[applegrove]

3. Now why would they want to encourage people to move to those states?

To up the electoral college votes perhaps? To encourage the trend toward moving south (poverty alone will move millions)and thus liquidate the power of the Dems in the North?

[ultraist]

4. compare cities cost of living

The data is a bit out of date but it would take twice as much income to live a comparable lifestyle in SF, as it would in Raleigh, NC.

It doesn't make sense that in states with a lower cost of living, their house exemption rules are laxer. Did they factor in cost of living regionally into the new bankruptcy laws?

http://houseandhome.msn.com/pickaplace/comparecities.aspx?FromState=NC&FromCity=Raleigh&ToState=CA&ToCity=San+Francisco&btnCompare=Compare&EarningFromCity=%2450%2C000&EarnToCity=%2496%2C722&Changed=1&prevFromCity=49&prevToCity=0&prevFromState=NC&prevToState=CA&EarningToCity=96722.0683287165&Ratio=1.93444136657433

I think the median value of a house nationally is currently around $170,000.

[slaveplanet]

5. for a full rundown

02-Mar
On the Amendment S.Amdt. 17
Feingold Amdt. No. 17.; To provide a homestead floor for the elderly.
REJECTED


This is a truly outrageous rejection. Allow us to explain as succinctly as we can:

Each and every Republican Senator, along with Jeffords (I) and Democrats Biden, Carper and Nelson, voted to reject a provision that would ensure that no elderly people in enough financial trouble to seek bankruptcy protection would lose their homes.

Here's how the debate went down, in a nutshell:



"In States such as Florida and Texas, there is a homestead exemption with an unlimited dollar value, meaning that any money invested in a home cannot be obtained by creditors. I should note, of course, that this creates other problems, which I will address in a few minutes. But other States allow a very limited value homestead exemption. In many States, the amount of equity a homeowner can protect in bankruptcy has lagged far behind the dramatic rise in home values in recent years. For example, in the State of Ohio, the homestead exemption is only $5,000, and in the Presiding Officer's State of North Carolina, the homestead exemption is $10,000. In this day and age, those paltry exemptions will do no good. We obviously have a problem, and it is hitting our older friends and family members the hardest. -snip

snip-After Feingold concluded his opening remarks, Orrin Hatch got up and blasted Feingold's amendment as an attempt to derail the entire bill and an infringement on the States' Rights regarding Homestead Exemptions (claiming the bill would be derailed because this infringement suggested in Feingold's amendment would cause numerous Senators from said States to vote against the Bill. As if any of those 55 Republican automatons would EVER vote against a bill if they were told to vote FOR it?)

Did you catch what just happened there? Orrin Hatch's problem with the amendment is that Feingold's amendment would have impacted on the "millionare homestead" laws in Florida and Texas, which allow estates of unlimited value to be kept by wealthy businessmen even if after declare bankruptcy. The laws have caused controversy in the past for the obvious reasons -- corporate officers responsible for criminal, fraudulent, or simply negligent behaviors by their companies (think WorldCom) can pump an unlimited amount of money into their own property, and that property then cannot be touched in bankruptcy proceedings.

Hatch says that requiring those homeowners to be subject to the same laws as the Republicans are, in this bill, holding all other elderly consumers to is an infringement of States' Rights.-snip

snip-Feingold's response to Hatch:


"The Senator from Utah has said this bill affects States rights with regard to the homestead exemption. This bill does affect the rights of Florida and Texas to have an unlimited homestead exemption, as it should. The Federal Government has an interest here in making sure wealthy people cannot abuse the system. I support that goal of stopping fraud. -snip

much more here:
http://www.dailykos.com/story/2005/3/6/63144/06015