Current Presidental Candidates Debate Their Support and Opposition to BAPCPA

[Barbisi]

I am wondering if other BK forum members are following the recent spate of coverage about who supported and opposed the BAPCPA changes of 2005.
With out naming any presidential candidates by identity or party, what I find most galling is the increase from 3 to 5 years in the BK13 maximum term, the intro of a means test and two mandatory counseling sessions.
What I find also shocking is how unaware I was in 2005 of this fateful financial BK "shift" which would one day upend and completely alter my life for many years to come. I believe the media barely covered the whole process deliberately to prevent people like myself from understanding that BK13 is one of the most difficult and harrowing life experiences one can go through. (I would rank it in the top six along with job loss, major health issues, home invasion/sexual assault, loss of a loved one , and a forced move, mainly because all of the above can lead directly to filing for bankruptcy protection.)
So many gloss over the impact of BK13 -after all it's only 5 years! Well, in five years, for example, you can : graduate from college, marry, have a baby, get divorced, lose your job ,contract cancer and die. And many other life-altering events can occur.)
Learning to live on a budget is easy , learning to put your life on hold for 5 years is not!
The residual effects of BK13 can last long after the five years are over. Think about that.
Yes, it will end- it has to!
All I can think about now is will I be able to get out of Colorado for good? Will my good health return at sea level? Will I ever work in my field again? Will I ever be able to take modest trips or vacations again?
For some such questions do not exist because you are in the house of your dreams in a state you deeply love and working at a job you adore surrounded by loving family members. In other words, you have the life you want. BK13 is only a minor inconvenience.
The Bk 13 debtors who suffer the most are the ones with out sufficient income to fund their plan , any one who incurs huge, fresh medical bills before their plan ends and the ones who want to radically change their life but recognize that to do so would jeopardize completing their plan.
If I have relayed any misinformation about BK13 changes, I stand corrected. And please no attacks!
I hope some one reads this rant and can relate to how I feel on a daily basis!

[flashoflight]

I don't think any of these proposed reforms mean anything until a pro-reform candidate is elected president and Congress has a makeup that is favorable to reforms, and even then I'm highly skeptical. I also feel the incumbent president has a good chance of staying in office. Furthermore, the previous president, who belonged to the opposite party, picked someone as VP who has unofficial nicknames that includes the phrases "credit card" and "banker". Because of that, I'm not holding out any bit of hope for BK reforms even if a pro-BK reform candidate gets the White House.

So here is my story of the 2005 reforms. I was in the federal courthouse at the 341 meeting for ch7 to help a family member who filed pro se. Another family member beat the deadline and filed with a lawyer. It was a madhouse. Everybody and their dog were trying to beat the deadline for bankruptcy reforms. Nobody wanted their case dismissed and refile under the new laws. I don't believe people were ignorant of the BK changes. Most anyone who was thinking of filing pulled the trigger before the deadline.

IMHO, another devastating reform was back in 1998 when the 7 year minimum for student loan dischargability was changed to never dischargable. Guess what party the president was at that time. Now you understand why I don't think it's useful to hope for reforms.

[Barbisi]

flashoflight, I think you totally misunderstood what I posted , no offence.
What I said in essence is that when that "reform" was enacted , I was 100% ignorant of how 12 years later those very "reforms" would effectively hobble my life for many years to come. I think there was nothing in the newspaper or on television. But it appears you knew a lot about the new laws and were even involved with filings. So at least you knew what to expect. I had zero experience with BK7 or 13, nor did I know any bk debtors!
Wow, you had 2 family members filing before the deadline? That's a lot, LOL!
I think the powers that be will never allow any leeway with BK13 - they may even even increase the term to 10 years and raise the filing and trustee fees !
I just don't want to end up in a second one and that means waving cruddy Colorado goodbye forever!

[justbroke]

The so-called reforms, were done, at least in part, to try to make the bankruptcy code more predictable. Every single judge in every single district, in every single State would make different rulings on Chapter 7 versus Chapter 13. It was disjointed and depending on which judge you went to, you could end up with a different term for your Chapter 13, or qualify for a Chapter 7.

The financial services industry definitely lobbied to make it more difficult to stay in a Chapter 7.. but the numbers really didn't change that much.

Think about this. In 1994, 67.92% of cases were Chapter 7s. In 2013, 68.02% of cases were Chapter 7s. While Congress' intent, at least as expressed through the Committee Notes, was to push more people to Chapter 13s. During the period where much of the law was unsettled, 2006-2008, it briefly dipped to 58.37 (2006), but steadily increased and hovered around 68%.

Yes, some people, that actually needed a Chapter 13 were caught up in the changes especially around the 36 months versus 60 months. This is an area where there courts did not have a "bright line test" (no known as the Means Test) and had various rules. The rules were inconsistent and too broad. While I think the Means Test is really a waste of time, it was "cleaned up" in the. landmark SCOTUS Lanning case. (Hamilton v. Lanning, 2010 WL 2243704 (U.S. Jun 07, 2010))

I think the current changes are not as bad as we may think because of the inconsistencies prior. I think that the powers that be should rethink the student debt discharge. Unfortunately changing that would also change the availability of money for the loans. It's a no-win situation, but student debt should be addressed in more meaningful ways.

As for a 10 year Chapter 13... people would opt for a Chapter 11 instead.

[Barbisi]

Well jb. you certainly know your BK facts and laws -you are the Ultra Guru of BK7 and 13!
What I wish was the term had not been extended to 5 years, meaning we would be done now and we would be packing up and preparing to get out of this $#@^&! immediately instead of having to wait 2 more years. My fear is the local economy will tank and then we won't be allowed to sell this house along with the solar panel lease and will be stuck here way beyond 2022! I just want out of Craporado!( My new name for the less than great state of Colorado. LOL)

[justbroke]

I wish the same thing regarding the 36 month plans!

I just got out of a five (5) year Chapter 13, and it was ugly at times. I had to... well... find alternate ways to cover the gaps. I sold a bunch of things that I didn't want to sell (just to make ends meet at some times). No one ever went hungry, but they didn't know what I did in order to keep it that way. Two of my credit unions allowed a $500 advance (one for 30 days, the other a thrift line) and that was like robbing Peter to pay Paul. it worked out in the end but man oh man!

Colorado is... a nice place to visit.

[JLM0706]

Well jb. you certainly know your BK facts and laws -you are the Ultra Guru of BK7 and 13!
What I wish was the term had not been extended to 5 years, meaning we would be done now and we would be packing up and preparing to get out of this $#@^&! immediately instead of having to wait 2 more years. My fear is the local economy will tank and then we won't be allowed to sell this house along with the solar panel lease and will be stuck here way beyond 2022! I just want out of Craporado!( My new name for the less than great state of Colorado. LOL)

I will trade you Southeast Kansas for Colorado!

[Barbisi]

Well, Kansas is too dull and flat for my taste , JLM0706 LOL! But I understand where you're coming from.
For me , Colorado has nothing to offer but dry,arid, unpredictable, harsh weather in winter and summer along with a brutal year round sun. (My husband already had his first bout of skin cancer last year and I am at a particularly high risk because I am very fair with red hair. I need to get a checkup ASAP but we are still trying to pay off last years' MRIs, skin cancer removal , and pathology testing.)
I dislike the outdoors here intently and find the lack of world culture extremely disappointing.
Basically , the whole "culture" here is : skiing, mountain climbing, marijuana & CBD oil,overpriced craft beers, dog parks, team sports - not necessarily in that order! If you are content with just that for your social and intellectual life ,then you'll love it here! And ,as jb said so eloquently, Colorado is....a nice place to visit! ( i.e. not live.)
The cost of living is now comparable to many bigger true cities offering real opportunities in the arts and tech careers, the traffic is among the worst for daily accidents, housing costs for renting and buying are sky high and show no signs of letting up.
I know Kansas is no live wire but at least it's much cheaper.than Colorado!

[womanonfire]

I am wondering if other BK forum members are following the recent spate of coverage about who supported and opposed the BAPCPA changes of 2005.
With out naming any presidential candidates by identity or party, what I find most galling is the increase from 3 to 5 years in the BK13 maximum term, the intro of a means test and two mandatory counseling sessions.
What I find also shocking is how unaware I was in 2005 of this fateful financial BK "shift" which would one day upend and completely alter my life for many years to come. I believe the media barely covered the whole process deliberately to prevent people like myself from understanding that BK13 is one of the most difficult and harrowing life experiences one can go through. (I would rank it in the top six along with job loss, major health issues, home invasion/sexual assault, loss of a loved one , and a forced move, mainly because all of the above can lead directly to filing for bankruptcy protection.)
So many gloss over the impact of BK13 -after all it's only 5 years! Well, in five years, for example, you can : graduate from college, marry, have a baby, get divorced, lose your job ,contract cancer and die. And many other life-altering events can occur.)
Learning to live on a budget is easy , learning to put your life on hold for 5 years is not!
The residual effects of BK13 can last long after the five years are over. Think about that.
Yes, it will end- it has to!
All I can think about now is will I be able to get out of Colorado for good? Will my good health return at sea level? Will I ever work in my field again? Will I ever be able to take modest trips or vacations again?
For some such questions do not exist because you are in the house of your dreams in a state you deeply love and working at a job you adore surrounded by loving family members. In other words, you have the life you want. BK13 is only a minor inconvenience.
The Bk 13 debtors who suffer the most are the ones with out sufficient income to fund their plan , any one who incurs huge, fresh medical bills before their plan ends and the ones who want to radically change their life but recognize that to do so would jeopardize completing their plan.
If I have relayed any misinformation about BK13 changes, I stand corrected. And please no attacks!
I hope some one reads this rant and can relate to how I feel on a daily basis!

Gee I was looking forward to shedding some tax debt in a chapter 13 and now I'm shaking in my shoes. Is it really that bad?

[justbroke]

Gee I was looking forward to shedding some tax debt in a chapter 13 and now I'm shaking in my shoes. Is it really that bad?

A Chapter 13 is for debtors with regular income (think salaried and no surprises). If anything happens, from a tornado to a loss of income, a Chapter 13 is difficult to maintain. It does not have room for major issues especially when the debtor is trying to protect property and has arrears in the plan. A Chapter 13 also won't help a debtor that cannot or simply refuses to budget.

The fact is that a Chapter 13 is static while life is dynamic. Being able to have a more elastic budget would help, but Chapter 13s may not be able to protect a debtor in every situation. If the debtor is technically into negative disposable monthly income (DMI), then any issue that occurs means that they don't even have flexibility to abate or pause DMI payments. For example, I was laid off for 2 months in my Chapter 13. However, my secured debt was already paid and I was only paying priority unsecured debt. That allowed me to pause my payments for two months and increase the remaining payments in the plan. If you're already negative DMI, you simply can't do that and a loss of income would likely cause a Chapter 13 to fail.

It's a tightrope, but more than 55% of debtors are now completing their Chapter 13s. Previously more than 60% of Chapter 13s failed, but it's become much more sustainable as attorneys and debtors learn how to live within the restrictions.

You have to go into Chapter 13 as being a fixed budget that you cannot control. If you are use to robbing Peter to pay Paul, then a Chapter 13 will feel like a prison sentence. If you're able to leverage a Chapter 13 to save or keep property, have "sufficient" DMI and/or retirement savings (as an emergency only and with permission), then it can work. I'm proof of it, and so are many others here on BKForum that have gone down this road.

Bottom line... the changes in 2005 were meant to push more debtors into Chapter 13s so that they would make meaningful contributions to the unsecured creditors. That also meant taking much of the subjective decision-making away from judges and using the dreaded Means Test. But, we can now say, from the statistics, that all it did was make the process a little more complex. The rate of Chapter 7s is now about the same. Most people that file Chapter 13, filed Chapter 13 purposefully to save property. Only a few Chapter 13s are conversions from Chapter 7s, despite the anecdotal evidence that suggests that Chapter 7 filers are forced into Chapter 13s more frequently than they are.

[Barbisi]

Woman on fire, I wasn't trying to scare any one about BK13 .I was just expressing my frequent frustration at being trapped in a state I literally grow to hate more each day. Whether it's the constant up and down temps, ever present dryness and blinding sun and crippling altitude (which causes me to hurt often and to always struggle against re- injury), or the monotonous quality of life here, the lack of opportunities in my field ,this dead end rising mortgage and solar panel lease ( in force until 2033) ,I only want to get out of here.
Therefore, it's very difficult to praise this BK13 while my health slowly disintegrates and any ambition I had about performing dies.
I can only hope we will be allowed to sell this house in 2022 and leave here for good(after my husband finds a new job some where else!)
But the bottom line is the 2005 reforms condemned me to two extra years here (from 3 to 5 years) that didn't exist before.
That was the original point of my first post -I only wish I had paid attention then (2005) to changes that would affect my daily life and future in such an unpleasant way. Maybe then this whole awful Colorado life chapter could have been avoided or commuted. (i.e. we could have left here a long time ago if we had just not bought a house here at all. (and not put 100k in CCs into a house we couldn't afford to repair and to update, one we didn't even like! ) LOL

[justbroke]

Barbisi, actually the pre-BAPCPA (2005) commitment period was 36 months, unless the court approved 60 months (5 years). The change in 2005 decided to make it 36 months minimum for below-medium income filers, and 60 months minimum for above the medium income filers. This was really to make the plan duration (commitment periods) more consistent and to use a "bright line test" as to what would have the court seek a 60 month plan, over a 30 month plan. Basically to take it out of the hand of the judges and making it an objective test rather than a subjective test.

It really depended on what the debtor needed, but many Plans pre-2005 read: "in a case filed prior to October 17, 2005, the debtor shall pay all disposable income into the plan for a period of not less than 36 months (unless unsecured creditors are paid 100%). " There were people that actually needed the 60 months of the maximum plan to deal with arrears and is why that number hasn't changed.

Blame it on the Means Test which is an abomination... if you ask me. I don't know what Congress was "thinking" at that time, but made something so complex and not very useful. If the Means Test was the end-all/be-all then we wouldn't need Schedule I/J in a Chapter 13. At least, that's my opinion.

[Barbisi]

Wow, again I have to say jb you really know your BK facts!
While I don't know much about all the 2005 changes, I only know I wish we were done now , instead of 2022!

[justbroke]

Wow, again I have to say jb you really know your BK facts!
While I don't know much about all the 2005 changes, I only know I wish we were done now , instead of 2022!

I wish I hadn't spent down my 401(k) without knowing all the facts! I learned a lot after filing bankruptcy that I wish I knew beforehand. It's a powerful tool. Chapter 13 scared me so bad, I thought that I'd be in a 100% plan and sending the Trustee $3,000/month, but it was different for a number of reasons. I did end up sending the Trustee $7,000/month, but that was to pay my mortgage, arrears, taxes, and Trustee fees.

I appreciate that Chapter 13 exists for those that can't justify a Chapter 7, or those that don't want to be subjected to the potential liquidation of their property in a Chapter 7.

[Barbisi]

jb, I wish we had not taken out a 15 year 401K loan to finance that awful house! We are scheduled to be able to pay it off in 2029. But, if we can sell this current house in 2022 and make a "decent" profit like virtually every one else in Colorado has been able to do, then our plan is to pay off the remaining balance immediately . Sure this will eat into our savings, but we will be free forever of the financial legacy of that crappy house! And perhaps then I can move on and stop daily cursing that house for causing our woeful plight! LOL