NYT: Storm Victims Facing Hurdles on Bankruptcy (new law effective 10/17)

[DeepModem Mom]

Storm Victims Facing Hurdles on Bankruptcy
By MARY WILLIAMS WALSH
and RIVA D. ATLAS
Published: September 27, 2005


When Congress agreed this spring to tighten the bankruptcy laws and crack down on consumers who took on debt irresponsibly, no one had the victims of Hurricane Katrina in mind.

But four weeks after New Orleans flooded and tens of thousands of other residents of the Gulf Coast also lost their homes and livelihoods, a stricter new personal bankruptcy law scheduled to take effect on Oct. 17 is likely to deliver another blow to those dislocated by the storm.

The law was intended to keep individuals from taking on debts they had no intention of paying off. But many once-solvent Katrina victims are likely to be caught up in the net intended to catch deadbeats.

Right after Hurricane Katrina struck, several lawmakers - mostly Democrats but including some Senate Republicans - suggested that storm victims along the Gulf Coast should get relief from the new law's stricter provisions, which are intended to screen filers by income and make those with higher incomes repay their debts over several years. Under the old law, which remains in effect until mid-October, many more filers can have their debts canceled quickly in federal bankruptcy courts.

But House Republicans, who fought off a proposed amendment that would have made bankruptcy filings easier for victims of natural disasters, said there was no reason to carve out a broad exemption just because of the storm....


http://www.nytimes.com/2005/09/27/business/27bankrupt.html?ei=5094&en=144bf04a014e2ff7&hp=&ex=1127793600&adxnnl=1&partner=homepage&adxnnlx=1127790229-xn5dYSbmSjLlZY8kfY0RLA&pagewanted=all

[niallmac]

1. I know this sounds ludicrous but

The POTUS (for the sake of argument lets say we had one) should ask congress to put this law on hold or whatever it would take. This is so unfair to the the levee victims.

[NYC]

2. I think it was intended to be an unfair law.

This is just such a blatant example of the unfairness.

[niallmac]

6. I agree. I need to memorize the names

of OUR dems who voted for it.

[saigon68]

10. AH YES THE DINOS

THE PAID AGENTS FOR

1. MBNA.

2. CHASE.

3. CAPITAL ONE

ET AL

[strategery blunder]

3. Didn't Democrats offer a bunch of amendments for disaster victims?

And victims of other extenuating circumstances?

Someone had hurricane victims in mind, but it sure as hell wasn't the rethuglikkkans. This law was intended to be unfair.

[salin]

4. Every amendment offered by dems was voted down by party line

the repubs said that they had to get it through "in whole", but could "tweak it later." Now is later -and I doubt that unless public sentiment swelled in a visible way - that enough repubs in congress (esp the house which has even more reactionary republicans) would let any change pass - even for disaster victims.

[pinniped]

5. I recall these A-holes always tried to present President Clinton...

with this bankruptcy crap bill. He never signed it.

[WildClarySage]

7. I think a class-action lawsuit against cc companies who have not

lowered their interest rates to reflect their lowered risks thanks to the bankruptcy law is in order.

[renabear]

8. This is a terrible, terrible law

I worked in the bankruptcy field for a while, helping run my exhusband's law practice--this law is terribly punitive and punishing. For example, you are expected to live on $25.00 worth of food a week--you cannot put down more than that on your petition. Many people who should be filing a chapter 7 are being pushed into chapter 13 repayment plans--which they cannot pay and these plans fail and are dismissed and the whole poverty cycle starts over again. It is just a travesty.

[NYC]

11. $25 a week for food?

Poor nutrition, and likely fattening food.

Welcome to DU.

[raccoon]

9. What a slanted statement this reporter starts out with,

"...consumers who took on debt irresponsibly,"

Yes, it's irresponsible to run up debts to pay for medical expenses, or when you lost your job.

Of course, if you're a corporation, irresponsibility is OK.
:sarcasm: