posted on July 25, 2002 08:52:44 PM new
There will probably be a huge rush to the courthouse to file for bankruptacy if this bill is signed into law. The attorneys will be advertising on TV to "file now" before the new law takes effect.
posted on July 26, 2002 03:24:04 AM new
Maybe they will go back to debtor prisons.
They'll also do well to pass a law to stop the people from shooting the people harrassing them or commiting suicide from the stress. Some will just pick up and move away with an identity change - so you better get those national ID cards going - with an ID chip if you can.
I suppose the credit card companies are doing a happy dance.This is another undeserved victory for corporate interests while thousands of people have lost their jobs and retirement savings.
Enron, WorldCom and other shady corporations can commit atrocious criminal accounting scandals and declare bankrupcy but with this bill, the little guy will be left out in the cold.
posted on July 26, 2002 07:28:33 AM new
They think the wealth is generated by the big guys. I'm waiting to read about some college educated executive who fires the entire production line to cut costs and can't understand why the company won't make money just on the vice presidents.
posted on July 26, 2002 07:36:52 AM new
I've always had mixed feelings about tightening the bankruptcy laws. Large corporations certainly seem to benefit most from reorganizations. I doubt many of the CFOs and CEOs, VPs,etc. are going to lose all of their personal property and all of their real estate. (Some are going to have to downsize to two or three homes. Tsk tsk.)
But even for little guys and gals, for everyone who has lost his/her home through a medical disaster, job loss, or law suit there seems to be a person who just couldn't keep his/her fingers off the charge plates. And I'm not talking about the person who loses his job and has to make a cash advance to cover his rent or mortgage. My sister has declared bankruptcy and my husband's brother and his wife have as well. My sister could have sued her ex for child support, stopped taking yearly vacations to St. John's,driven an older car,bought less furniture and fewer dresses. She didn't. My BIL and his wife owned three computers and smoked and drank too much. All of us bailed him out. Sometimes I feel that my husband and I are the fools for living within our means.
posted on July 26, 2002 07:47:44 AM new
You are wise to live within your means - but why in the world would you give money to someone that blows it on a vacation to St Johns instead of going yourself? Cut the suckers OFF.
posted on July 26, 2002 07:55:21 AM new
Oh, no, gravid. I don't give money to any of them. My sister had just lived the way she pleased and when she couldn't pay the bills, declared bankruptcy. I meant that the rest of us have foot the bill by paying more for merchandise or interest to cover the cost of her not paying for her purchases.
posted on July 26, 2002 08:38:39 AM new
Years ago declaring personal bankruptcy got you off scott free. A few years ago they revised the law and made it tougher. But "tougher" was basically a joke. I had friends that went "bankcrupt" because they couldn't go on vacation 3 or 4 times a year and have new cars, etc and pay for it all. So, bankcruptcy eliminated 30-40g of credit card debt. Now they want to actually hold people accountable.
Companies file chapter 11 to protect assets from creditors who want payment NOW. Eventually in most cases, the creditors get paid, unlike personal bankruptcies where creditors are stiffed.
I think it's long overdue. Ken Lay declares bankruptcy and gets to keep his $15mil house and Rolls? Nahhhh, he can live in a $100k duplex til he gets on his feet.
posted on July 26, 2002 11:57:02 AM new
Yes, there are going to be more bankruptcies filed before this law is put into action. But, hey, the numbers of bankruptcies have been increasing year after year anyway. Hopefully, once this law is in effect this will result in a lesser number being filed.
I believe it's long overdue too.
The system was set up to help those truly in need. Those who got buried by unexpected large bills. But as happens in a lot of 'helpful' laws, there are those who take advantage of the system.
The legislation applies a new standard for determining whether people filing for bankruptcy should be forced to repay debts under court-approved reorganization plans rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25% of the debt over five years or has at least the median income for his or her state, a reorganization plan generally would be required.
I think that's great. This isn't a 'big corporation' win. It's a win for all people who have to pay higher interest rates on their credit cards to make up the money for those who abused them.
Why should any business lose money when the abuser has the ability to pay within a few years. That rewards the abusers.
posted on July 26, 2002 03:23:38 PM new
Personally, I think the credit card companies are the financial equivalent of drug dealers. They want to get you hooked and squeeze every penny out of you. I think the new law really protects the credit card companies from their own incompetence.
Sure, there are people who abuse credit and bankruptcy, but the credit card companies are to blame also.
I think the ease of declaring bankruptcy should be tied to the ease of getting credit. The number of pre-approved credit cards being offered is ridiculous. Every once in awhile you hear about someone's dog getting an offer for a preapproved credit card. That shows the companies aren't behaving responsibly.
The credit card companies use deception to trick people into paying late. When I got my first credit card about 20 years ago, most cards had a 7-day grace period, so even if you dropped your payment in the mail on the due date it would still be received by the end of the grace period and you wouldn't get hit with a late fee. Now, the grace period is gone and, if you check the small print in your agreement, it's not unusal to find that your payment must be processed by 9AM to be counted as being paid that day. So, really, your due date is the business day before your due date. A worst-case scenario is if you due date is the Tuesday after a Monday holiday. So, if your payment is due Tuesday the 15th (9AM) and Monday the 14th is a holiday, you really have to have your payment processed by the end of Friday the 11th. So, since your due date is the 15th, you'd think dropping the payment in the mail on the 9th would be OK, but there's good chance you'd be hit with a late fee.
I've also noticed that an unusual number of due dates fall on weekends and holidays. There's no good reason for this.
While I don't think credit card companies should be required to offer payment grace periods, they should be required to make due dates fall on regular business days and all payments processed by the end of the day should be counted as being paid that day.
I also think the minimum monthly payment should be at least 5% of the balance. Most are about 2%. If you got a new credit card, charged it to the limit and then just sent in the minimum payment of 2% it would take about 15 years to pay it off. That's ridiculous. It just encourages people to get more credit. After all, you can get $1000 worth of merchandise for just $20 a month. But, it adds up faster than most people think.
In the 20 years that I've had credit cards I've received dozens and dozens of increases to my credit limits. How many did I ask for? Zero! Again, this is another way the credit card companies keep you hooked. So another way to lower bankruptcies is to prevent companies from giving unasked for credit limit increases.
Another stupid thing credit card companies do is increase the interest rate when a person makes a few late payments. Can someone explain to me how this helps the user? The company is eventually getting paid, they're getting a late payment fee, so why raise the interest rate? It only increases the chance of the user declaring bankruptcy.
I think there should be 2 types of credit card credit - protected and unprotected. Protected would be limited to 10% of the user's annual salary and would be very difficult to discharge through bankruptcy. Someone making $25000 would have $2500 maximum of protected credit. Anything over $2500, whether from existing credit cards or new ones, would be unprotected and easily discharged. The user would simply be able to fill out a Partial Bankruptcy form and send a notarized copy to the company and a government department and it would be discharged. The user would then have a black mark on his credit history. This would certainly discourage the credit card companies from giving people more credit than they can handle.
This law basically protects the credit card companies from themselves. It would be like if drug dealers wanted congress to fund research for a pill that would decrease the chance that their drug-addict customers would die of an overdose. And that's what bankruptcy is - a financial overdose.
posted on July 26, 2002 03:29:23 PM new
This change doesn't do anything to police the big guys.
If you have the money and can build a second home in Florida, they can't touch your house in Florida. That's why the Worldcom guy built the multi-million dollar home in Florida. Several of the savings and loan crooks did the same thing.
The big guys also have the ability to shift income that the little guy doesn't. If you work for a living, there is no way to shift the income. If I derive income from stocks, bonds, etc., the wealthy can shift this income from the git-go to children or parents and it can't be touched provided it was done long enough before filing. If they're in California they can shift large amounts of money to a retirement paln and it can't be touched. OJ Simpson gets $18,000 a month in "retirement" income after filing bankruptcy.
This bill does nothing but keep working people under the yoke of debt, while the wealthy with a little planning still come out with huge amounts of cash and assets.
This just another case of the govt and corporations sticking it to people that can't fight back.
posted on July 28, 2002 07:12:31 AM new
Reamond This change doesn't do anything to police the big guys.
Well...maybe that's going to change. [Keeping fingers crossed here.]
GOP eyes seizing mansions, yachts of corrupt executives By Dave Boyer THE WASHINGTON TIMES
House Republican leaders, heading home to face voters anxious over retirement security, announced yesterday they will introduce legislation to seize the mansions and yachts of corrupt corporate executives.
"We need to do more to strip corrupt corporate kingpins of their ill-gotten gains," said House Majority Whip Tom DeLay, Texas Republican. "We're taking the mansion. We're draining the accounts. And we're coming after the yacht."
Mr. DeLay was flanked at his news conference by an enlarged photograph of a $15 million Florida mansion under construction for Scott Sullivan, the former chief financial officer of WorldCom, which stands accused of defrauding investors out of billions of dollars. Republican leaders said they will introduce their bill in September, after lawmakers' monthlong August recess that begins for the House today.
posted on July 28, 2002 10:30:03 AM new
Well what's changed by that? Gee, seizing property from accused criminals ? That's been happening to poor people for years. Remember the poor guy in Michigan that had his car seized for soliciting a hooker from his car? It was actually his wife's car, and she couldn't get it back.
So... the feds are "considering" going after these crooks assets ? If a poor person had stole $700 he/she would still be in jail and they would lose everything - but for the wealthy, we have to think about it. Wake up.
But this does nothing to address bankruptacy loopholes for the wealthy.
I don't understand why working class people have become so eager to jump on others in their own class, yet totally ignore the rape and pilage that is going on by the wealthy in this country on a dailey basis. It is not just bankruptacy laws, it is tax policy, criminal justice, everything. We have two sets of rules now, those for the working people and those for the wealthy.
posted on July 28, 2002 10:41:43 AM new
Reamond - So... the feds are "considering" going after these crooks assets ? If a poor person had stole $700 he/she would still be in jail and they would lose everything - but for the wealthy, we have to think about it. Wake up.
Okay...I'll try to "wake up". Please explain to me how this has been handled any differently by the Clinton administration than by the Bush admin. What I see now is these unfair issues are being changed. Did Clinton try to change them during his administration? Maybe he did and I'm just not aware of it.
When anyone speaks to issues of the different classes, I'd ask....is Gore from the working class? Was Clinton? I don't think either was.
These issues are concerns to every working class American, and I'm no different. I just see an administration that is working to make changes in some of the areas where the American public is tired of being treated differently than the wealthy.
posted on July 28, 2002 08:08:19 PM new
Clinton was from the working class.
It was the Clinton administration that wanted stock options expenced, among other changes. It was the corporations and republicans that nixed it. You see, a huge chunk of "income" disappears from the balance sheets of corporations like Microsoft and eBay if these options are expenced. The Clinton admin was on to what was going on and tried to stop it, but the republicans killed the legislation. A president can do very little without the backing of Congress.
Clinton developed tax policies that allowed the middle class to thrive, as well as balance the budget with surpluses. Bush wrecked it by his protection of the wealthy.
Bush was still unwilling to address the criminal accounting by first saying that we needed no new legislation, but after Wall St and public opinion indicated otherwise, he changed his position.
Edited to add- take a look at the link that krs posted quoting Clinton the other day. This current mess is clearly the fault of the congressional republicans and further aggravated by the Bush presidency.
[Keeping fingers crossed here.]