Bankruptcy "reform".....they're at it again....

[truebrit71]

WASHINGTON, Jan 25 (Reuters) - U.S. Senator Charles
Grassley is expected to reintroduce bankruptcy reform
legislation this week as Congress tries once again to make it
tougher for consumers to abandon their debts.
An aide to the Iowa Republican said he planned to introduce
bankruptcy reform legislation as early as Tuesday. The
legislation will be similar to the bill passed by the U.S.
House of Representatives last year.
The Senate is expected to consider bankruptcy reform early
in the session, staff said.
Bankruptcy reform legislation has come close to passage
several times in recent years -- only to stall at the last
minute. Both houses of Congress have approved measures that
would make it harder for consumers to invoke bankruptcy to
avoid paying off their debts, a key goal for credit card
companies.
Bankruptcy filings were near record highs in 2004.
Commercial and personal bankruptcy filings totaled 1.62 million
cases in the year ended Sept. 30, 2004, compared with 1.66
million the previous year, according to the Administrative
Office of the U.S. Courts.

LENDERS WANT "MEANS" TEST
Among provisions supported by the financial services
industry is a "means" test for individuals seeking bankruptcy
protection as a way to eliminate their debts.
Under such a provision, families whose incomes are above a
certain level would not qualify for Chapter 7 bankruptcy
protection. Instead, they would fall under Chapter 13 and be
forced to repay some debt while retaining some assets.
Under bankruptcy law, Chapter 7 calls for the liquidation
of assets but allows filers to keep some property such as a
primary residence. Chapter 12, for family farmers, and Chapter
13, for individuals, call for an adjustment of debts. Filers
are required to enter a repayment plan, but allowed to keep
their assets.
Credit card companies, retailers and auto lenders argue the
legislation is needed to stop consumers from racking up debt
and then turning to the courts with bankruptcy filings to avoid
repayment.
But consumer advocates say the proposed bankruptcy reform
measures simply reward businesses that aggressively market
consumer loans.


This needs to get re-defeated...unless you are keen on the return of Debtors Prisons.....

[Jacobin]

1. Thjis is one seriously flawed and unfair

piece of legislation.

If you owe millions, you can file Chapter 7. If you don't, you will have to live on the IRS subsistence budget for 5 years and give the rest to credit card companies. In other words, you'll be living in a cardboard box under the freeway.

It is very very very bad, and it'll probably pass this time.

(BTW, Holy Joe is a big supporter of this crap)

[DemocratSinceBirth]

2. It Makes No Sense At All...

All bankruptcy does is prevent creditors from making the life of debtors miserable...


If broke folks can't declare bankruptcy they still won't be able to pay their bills...


Where's the wisdom of it?

[Jacobin]

7. There is no wisdom in it

Credit card companies are under the illusion that there is blood in turnips.

Typical sick RW legislation that will do no one any good.

[TwentyFive]

3. Bush -- against returning to Debtors Prisons

Indentured Servants are more productive.

[Beer Snob-50]

4. What I feel is needed is a way to stop those who

who use bankruptcy to enrich their wallets. I use to work in a business where one of our competetors use to buy tons and tons of product sell it and then go bankrupt. He did this numerous times using different family members to head the company.

[DemocratSinceBirth]

5. I Am Sympathetic To Creditors

I am a small businessman who expects businesses that I extend credit to pay me in a timely manner but most personal debtors are down on their luck....

[Beer Snob-50]

6. we do have to protect those personal debtors.

i do think that the courts have to do a better job of vetting those who are just trying to screw their business associates.

[Jacobin]

8. This won't affect business bankruptcies

Just the working poor.

[DemocratSinceBirth]

10. I Know...

I am pretty tough on collecting from businesses but I distinguish between folks who can't pay their bills and businesses that don't want to...

Also, I have been known to reduce invoices or take goods or services in lieu of payment from down on their luck businesses...

Like most Pug ideas, bankruptcy reform is unnecessarilly punative....

[Coastie for Truth]

12. Right.

The fraud is NOT in personal bankruptcies hiding assets---- it is in business bankruptcies and Chapter XI reorganizations.

[DemocratSinceBirth]

13. I Think Reorganiations For Businesses Are Fine In Principle

It saves jobs....


Unfortunaely most businesses can't pull it off....

[Coastie for Truth]

11. Agree

Like Kenneth Lay, and Paul Bilzerian (remember Link Trainers, Singer Sewing Machines, Graflex cameras - he bought them all, put them into one shell - and raped them) -- and Ken Lay's mouthpiece James Addison Baker III Esquire, Solicitor, Barrister and Counselor at Law.

[Coastie for Truth]

9. Let's look at Chapter XI and Business Bankruptcies too

1. Start with the Sarbanes-Oxley model. Let's look at any and all attorneys, accountants, auditors, financial analysts, etc (and outside directors) who gave the business any advice - hold them to a fiduciary duty to the creditors -- and at least make them pay back any professional fees (as a start).

2. "Officers and Directors" - let's hold them to the same high standards that Attorney General John 6666666666666666 Ashcroft held Martha Stewart and NY US Attorney Rudy "Thank God Bush Is President" Giuliani applied to Leona Helmsley --- and make their assets reachable by defrauded creditors.

3. As long as we are making extending Sarbanes-Oxley and holding attorneys, accountants, auditors, financial analysts, officers, and directors liable -- No "Homestead exemption" for dudes like Ken Lay and Paul Bilzerian and Enron mouthpiece (and Bush consigliere) Jim Baker.

What I really want is for the now pensionless employees (and the FBPGC) to be able to go after the scam artists who set un - and raided - pension and health/welfare plans.

[Up2Late]

14. O.K. Time to make a list...

...of all the recent :puke:Republican proposals to screw the poor.

1) Tort "Reform" -- to take away our right to sue Corporations

2) Medical Malpractice "Reform" -- to take a patient right to sue Bad Doctors

3) Social Security "reform" -- to take the "Security" out of Social Security

4) Asbestos Lawsuit "reform" -- to limit Haliburton's liability to pay personal injury suit settlements (because of his Daddy's former company Dresser Industries, that Haliburton bought)

and now again
5) Bankruptcy "reform" -- to take away our rights and to once again to make it tougher for consumers to abandon debts, created by Mega Banks and Financial Corporations, extending credit, via Credit Cards, to people with poor credit repayment histories. :crazy:

I'm sure their are more I missed. Feel free to add to my list.

[cosmicdot]

23. Medicaid n/m

[BlueInRed]

15. Do you have a link

I was looking for this on Yahoo News and couldn't find it, and supposedly, they post Reuters stories.

[MikeG]

16. I represent debtors - This will suck.

[msgadget]

17. What is the left doing against the power of banks to raise

interest rates almost at random and then still expect consumers to meet their obligations on a timely basis?

If in representing debtors, you and your colleagues nationwide constantly outline these conflicting bank requests, do you think you'd be able to emphasize how greedy and ridiculous they're being?

[AirAmFan]

19. When banks pay 1% interest to savers, but charge 14% to above 20%

to credit-card borrowers, of course they're going to have trouble with consumer defaults. Their best customers will be pople who have no intention whatever of paying them back.

There OUGHT to be little chance for banks to recover from defaulters on usurious credit-card loans.

If banks want protection from consumer defaults, then consumers ought to get protection from unconscionably high interest rates, now often more than twenty times the banks' cost of credit.

[msgadget]

22. Absolutely.

Is there anyone on this issue already - a group, PAC or something?

[suziedemocrat]

31. This affects me personally - I will have to declare bankruptcy.

I work as an IT contractor. Ever since out-sourcing became so popular - I have had to live on credit cards when I have been unemloyed (usually about 1-2 months every 18 months or so.) I also have to move constantly - always getting new apartments with each 6 month contract. Some went a year - some 18 months - but that was usually the maximum. Once during a short period when I was unemployed - I fell behind (about 15 days late) on my Amrican Express Optima - my primary card - and the rate was raised to 25%. Other cards also raised my rate to 19% or 22% even though I was not late with them. Then - things got even more tough and it was 3 month contracts with me living in a hotel with a very large storage locker. I could barely make ends meet with the high interest I was paying. I took a 3 month contract in the town where my 79 year old mother lives and finally got an apartment after over a year without one. The recruiter told me this was a very long term project. My first day an employee told me "no way will this contract go past 3 months." I asked around and all said three months was all I could hope for. Great - I had a 6 month lease and tons of debt! After 6 weeks I was done with all of my work and most of the employees didn't have anything to do either. They kept me 3 months and I was back to living in hotels - but I also had the expense of an apartment. I grew extremely depressed and almost had a breakdown. Came back here to find a job close by if possible. Couldn't pay my bills. With all of the late fees and penalties I owed 30% more in just 6 months. There is no way I will ever pay back my debts. I can't even find an entry level job around here because it looks like I am a total flake who can't keep a job. It is true I used to like the variety of contracting - but then it became crazy. The contracting companies first stopped offering 401K plans - then health insurance. I HAVE to declare bankruptcy - and this law has me scared to death!!!

[LastLiberal in PalmSprings]

18. If I recall, this bill would give credit card companies

the same priority as child support payments. Here's a letter from June 2000 which sets out the concerns of such groups as ACES (Association for Children for Enforcement of Support),
National Organization for Women, National Women's Law Center and others.

I'm assuming the Repugs are trying to get the same thing through again.

[rumpel]

26. That is ridiculous. Would they also start arresting people for debt?

While there are many crooks, who use bankruptcy as a standard way out of paying, Child Support and lenders are completely different issues. The laws are all favoring lending institutions already. Mass mailing of deceptive "approved" and "pre-approved" invitations, even my minor child receives every day, first have to be regulated. People are being promised a very low rate, only to discover later that the interest rate adusts to the lenders' discretion. For some unsuspecting consumers, a $200 balance can mushroom within months, trapping them into an ever deepening debt.
And as I posted in another thread some time ago, LA Times reported that credit card companies, among them admittedly, Bank One, delibertaley lower consumer credit ratings, by not reporting the credit limit as a policy, making it look that the consumer is maxed out, as the reporting agencies use the existing balance as the limit.
This is another example of the repubs favouring their corporate donors over their citizens.:grr:

[cosmicdot]

20. in 2001, Sen. Wellstone said of the bill ...

~snip~

Senator Paul Wellstone (Democrat-Minn.), one of only 13 Democrats who voted against the Bill, said, "What does it say about us as a Congress — and I level this charge at Democrats and Republicans alike — that the first major piece of legislation that we bring to the floor of the 107th Congress is an unjust and unfair bankruptcy for the benefit of big banks and credit card companies?...

"A special interest boondoggle, a bail-out for the big banks and credit companies is ahead of education, it is ahead of prescription drug coverage for seniors ..."

Wellstone attempted to push through an amendment preserving bankruptcy protections for people hit by catastrophic medical bills, the cause of nearly 50 percent of filings.

~snip~
http://www.cpa.org.au/garchve3/1039bill.html (article from The Guardian March 28, 2001)

WHAT’S THE ISSUE? HOW IT MAY AFFECT YOU
HOW THE INTEREST GROUPS SEE IT IT ALL BEGAN . . . THE MONEY
THE PARTY LINE THE PROCESS HOW THE VOTES WENT
http://www.opensecrets.org/news/bankruptcy/

Refresher: Democratic Senators who voted 'yea' with the Republicans on the Bill in 2001:

Name with:
- $Total PAC & Individual Contributions from NCBC Members**

(National Consumer Bankruptcy Coalition includes such members as American Bankers Assn., Visa USA, National Retail Federation, Mastercard International)

-$Total PAC & Individual Contributions from Finance/Credit Companies**

S. 420 Vote*

Daniel K. Akaka (D-Hawaii)
$11,700
$0

Max Baucus (D-Mont)
$7,000
$0

Evan Bayh (D-Ind)
$4,000
$5,500

Joseph R. Biden Jr (D-Del)
$1,000
$78,575

Jeff Bingaman (D-NM)
$20,000
$3,000

John B. Breaux (D-La)
$0
$0

Robert C. Byrd (D-WVa)
$17,000
$1,000

Maria Cantwell (D-Wash)
$0
$1,000

Jean Carnahan (D-Mo)
$0
$0

Thomas R. Carper (D-Del)
$4,795
$109,945

Max Cleland (D-Ga)
$0
$500

Hillary Rodham Clinton (D-NY)
$6,000
$9,350

Kent Conrad (D-ND)
$24,377
$15,200

Tom Daschle (D-SD)
$0
$5,000

Byron L. Dorgan (D-ND)
$2,000
$0

John R. Edwards (D-NC)
$0
$0

Dianne Feinstein (D-Calif)
$9,700
$5,000

Bob Graham (D-Fla)
$500
$0

Ernest F. Hollings (D-SC)
$0
$1,750

Daniel K. Inouye (D-Hawaii)
$0
$0

Tim Johnson (D-SD)
$22,498
$25,750

Herb Kohl (D-Wis)
$0
$0

Mary L. Landrieu (D-La)
$3,500
$1,000

Patrick J. Leahy (D-Vt)
$0
$0

Carl Levin (D-Mich)
$0
$0

Joseph I. Lieberman (D-Conn)
$14,200
$11,500

Blanche Lambert Lincoln (D-Ark)
$2,000
$525

Barbara A. Mikulski (D-Md)
$0
$0

Zell Bryan Miller (D-Ga)
$14,000
$6,000

Patty Murray (D-Wash)
$1,000
$0

Ben Nelson (D-Neb)
$29,000
$9,750

Harry Reid (D-Nev)
$5,568
$8,568

Charles E. Schumer (D-NY)
$16,000
$17,500

Deborah Ann Stabenow (D-Mich)
$5,700
$2,000

Robert G. Torricelli (D-NJ)
$4,000
$32,250

Ron Wyden (D-Ore)
$0
$0


*The Senate voted 83-15 in favor of S. 420, a bill that would overhaul the nation's bankruptcy laws. The "yes" vote favors the NCBC and finance/credit industry.
**Based on FEC data downloaded 2/1/01.


Peter G. Fitzgerald (R-Ill) - didn't vote because of conflict of interest w/family banking business (unlike HMO Frist who won't do the same on medical/health bills)
$0
$2,000

Barbara Boxer (D-Calif) - didn't vote
$0
$1000


Voting "no":

Republicans:

Sam Brownback (R-Kan)
$0
$0

Kay Bailey Hutchison (R-Texas)
$17,000
$17,000


``````````````````````````

Jon Corzine (D-NJ)
$0
$8,000

Mark Dayton (D-Minn)
$0
$1,000

Christopher J. Dodd (D-Conn)
$1,000
$10,000

Richard J. Durbin (D-Ill)
$1,000
$1,500

Russell D. Feingold (D-Wis)
$0
$500

Tom Harkin (D-Iowa)
$0
$2,000

Edward M. Kennedy (D-Mass)
$7,000
$18,000

John Kerry (D-Mass)
$0
$8,500

Bill Nelson (D-Fla)
$20,000
$12,750

Jack Reed (D-RI)
$10,058
$2,000

John D. Rockefeller IV (D-WVa)
$0
$0

Paul S. Sarbanes (D-Md)
$30,700
$7,250

Paul Wellstone (D-Minn)
$0
$0

http://www.opensecrets.org/news/BANKRUPTCY/senate_vote.htm

Co-Sponsors of Grassley's S.420:

Sen Biden, Joseph R., Jr. - 3/1/2001
Sen Carper, Thomas R. - 3/1/2001
Sen Hatch, Orrin G. - 3/1/2001
Sen Johnson, Tim - 3/1/2001
Sen Nelson, E. Benjamin - 3/6/2001
Sen Sessions, Jeff - 3/1/2001
Sen Torricelli, Robert G. - 3/1/2001

http://thomas.loc.gov/cgi-bin/bdquery/z?d107:s420:

[Vinca]

21. Wow - I feel doubly screwed.

As of last December I had to give up my health insurance because I couldn't afford it. Although I've never even had a late payment on anything in 30+ years, I had to convince myself that if something horrible happened that I couldn't finance, I shouldn't be ashamed to declare bankruptcy. Guess that won't be an option. Sometimes I wonder what they want from those of us who aren't rolling in cash. Blood?

[DrGonzoLives]

24. Lovely

First of all, I love how consumers are expected to demonstrate "personal responsibility," but corporations can declare bankruptcy, make off like bandits, and fuck their employees over at the same time.

Second, why aren't we going after the cause of bankruptcy - predatory lenders and credit card companies? Yeah, yeah, people waste money to buy shit they don't really need. Yeah, we know. But if credit card companies weren't marketing to college students and senior citizens on Social Security, or people with low incomes, we wouldn't see all these filings.

I would love to see some unbiased statistics on who files for bankruptcy sometime.

[lavenderdiva]

29. Good argument about going after the cause of bankruptcy...

as cosmicdot mentions earlier, over 50% of the personal filings stem from unexpected medical bills that are too high for individuals to cover. Why not try to 'fix' the healthcare system for people in this country that don't have insurance, or those whose bills exceed their ability to repay? I think that would be a huge help, and possibly lower the number of filings each year. This piece of legislation is crap. But I have a question to those who have posted earlier, what can we do to educate lawmakers to see that this is bad legislation, and either vote down, or re-craft it to target the real problems? i.e. big businesses using it as a business tool...

[SammyWinstonJack]

25. Bankruptcy is only for wealthy greedy people like say, The Donald.

And taxes are only for the little people. This Country sucks in more ways then one.

[LunaC]

27. We need to frame this as the "Anti-Family Medical Consumer" bill

A newly released study has found that medical bills and other financial
effects of illness or injury contributed to nearly half of the more than one
million personal bankruptcy filings in the United States last year. Single
women and families headed by women, as well as the elderly, were most
likely to be driven into bankruptcy by medical problems.

Single women and single mothers are the largest demographic group filing
for bankruptcy, accounting for 39 percent of filings, compared to 33
percent for married couples and 28 percent for single men or single
fathers. Divorced women are 300 percent more likely to file for
bankruptcy than married women, and alimony claims are involved in nearly
a third of all bankruptcy cases—evenly split between women driven into
bankruptcy by unpaid alimony, and men filing for bankruptcy because they
cannot sustain both alimony payments and other bills.

The study was conducted by Elizabeth Warren, a law professor at Harvard
University, together with Teresa Sullivan, dean of graduate studies at the
University of Texas, and Melissa B. Jacoby, a lawyer....
-snip-

Many American families who think of themselves as middle-class are “just
one serious illness away from financial collapse.'

http://www.wsws.org/articles/2000/apr2000/bank-a28.shtml

[AP]

28. Why are the banks shifting the job of doing due dilligence off themselves

and on to the goverment?

Why don't banks just stop giving loans to everyone no matter how unlikely they will be able to repay the loans?

Bankruptcy reform just has the whiff of banks asking the government to "please protect us from having to do our work." If anyone's profligacy should be the focus of attention, it should probably be the loan approval managers at our nation's banks.

[Jacobin]

30. Its another form of corporate welfare

Have the government collect your debts for you.

You are absolutely correct. If they underwrote their loans better, their losses would be fewer, but then that might cost money. So why not just lend money to anyone and then get the government to collect it for you when they default?

[cascadiance]

32. We need a "Reform Reform" bill...

... to establish some ground rules of what justifies calling a bill a "reform" bill to get rid of the confusing marketing "frame" of reference language that keeps getting thrown at us to blind us to what's really going on.