New bankruptcy law a problem for Katrina victims

[RobertSeattle]

GOP President and GOP Congress: Welcome to REALITY

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-01T174108Z_01_N01462902_RTRIDST_0_WEATHER-KATRINA-BANKRUPTCY.XML

New bankruptcy law a problem for Katrina victims

Thu Sep 1, 2005 1:42 PM ET
By Jonathan Stempel
NEW YORK, Sept 1 (Reuters) - Hurricane Katrina is expected to cause a spurt of bankruptcy filings by storm victims -- and sweeping changes in U.S. bankruptcy laws may leave them even more strapped than they otherwise might be.

The Bankruptcy Abuse Prevention and Consumer Protection Act, which takes effect Oct. 17, includes a slew of rules and restrictions intended to curb abuse. These are expected to make it harder for individuals to file to keep creditors away, and more difficult for businesses to reorganize.

But the law wasn't directed at people who file because of catastrophes such as Katrina, in which people lost homes, businesses and perhaps months of regular paychecks. Katrina has caused widespread devastation in Louisiana and Mississippi and left New Orleans, population 462,269, virtually uninhabitable.

(more at link)

[Jacobin]

1. Yep, it sure will

For one thing, you have to have pay stubs from the last six months of employment......or the case will be dismissed.

not to mention the bazillion other little bullshit stuff they've crammed into the bill to make it expensive and burdensome for people who have been hit with financial misfortune.

[elehhhhna]

3. They average your past income. If you have none now, it doesn't matter.

The repayment plan is determined by your PAST wages.

[whatever4]

2. But the law wasn't directed at people who file because of catastrophes...

I question that. In light of the impending housing bubble bust, I question that highly

It's always been directed at people facing hard times. Else why isn't there a health-care exclusion of some kind? People frequently face bankruptcy due to medical costs...and what's the state of our health care in this nation? These laws were directed at the people who would most need to declare bankruptcy, with no apologies about it.

And the hurricane season we predicted to be a bad one this year.

No, I question highly that these laws weren't directed at those exact victims of this hurricane; all they didn't know was the name of the storm.

[VADem11]

4. Democrats have proposed protection for hurricane victims

http://atrios.blogspot.com/2005_08_28_atrios_archive.html#112560030552421807

Every Dem should support this. I'd like to see the repugs trying to oppose this.

[Lindsay]

5. Some Dems are on the ball on this.

Rep. John Conyers, Jr., Rep. Mel Watt, Rep. Jerrold Nadler, and Rep. Sheila Jackson Lee announced today that when Congress returns next Tuesday, they will introduce legislation to protect the thousands of families and small businesses financially devastated by Hurricane Katrina from being penalized by anti-debtor provisions contained in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, scheduled to take effect on October 17, 2005. Reps. Conyers, Nadler, and Jackson Lee released the following joint statement:

"We are concerned that just as survivors of Hurricane Katrina are beginning to rebuild their lives, the new bankruptcy law will result in a further and unintended financial whammy. Unfortunately, the new law is likely to have the consequence of preventing devestated families from being able to obtain relief from massive and unexpected new financial obligations they are incurring and by forcing them to repay their debt with income they no longer have, but which is counted by the law.

More at http://atrios.blogspot.com/

[hobbit709]

6. I would just walk away

not file and start over. If they want to take the house-let them have the rubble, if they want the car-let them have the rusty pile of scrap metal, have no bank account for them to get at, and fuck the credit card companies.

[SammyWinstonJack]

8. Won't they garnish wages? In Texas they can only garnish wages

for some fed taxes, child support and student loans. Are the gulf states affected by Katrina the same?

[KittyWampus]

7. oh, the gop will sign a bill and feign compassion