A BK reform bill to be reviewed tomorrow

[bkadvisor]

I honestly would not hold out any hope for this. As far as over all priorities, a fundamental overhaul of the BK system is not even on the radar.

I'm a newbie to this forum but not to the bk laws. I contribute in other forums so I hope I'm welcommed here.

The above statement is dead on. The banking and CC industry spent 8+ years and lots of money to pass BACPA 2005. They still have mucho politicos in their pockets (no pun intended). Who else could get $300BB and not have to explain where it went?

The House & Senate have passed the cramdown provisions for bk judges to use in Chapter 13s for mortgages on primary residences. There were at least 4 versions of this bill floating around for the past 2 years. A bit of bk trivia.....bk judges have been allowed to cramdown mortgages on second, third and so on homes for decades. The prohibition on primary residences was changed in the bk reform of 1988. Proponents of the change back then argued that the cramdown would effect the interest rates and acquisition of mortgages on primary residences. So once the president signs it into law bk judges will finally be able to do for primary residences what they have done for vacation and investment homes for years.

When this first came up last month.....it did not pass easily despite Madam Speaker's loud support. I have watched the president's responses to ??s regarding CC interest rates.....he quite smoothly evades directly responding. I'm sure nothing will change until the middle of 2010 (the present legislation) which gives the CC companies plenty of time to put their loopholes into play.

If BACPA gets reformed it will be piecemeal. Therefore don't hold off filing waiting for them.

[GWBcasualty]

If BACPA gets reformed it will be piecemeal. Therefore don't hold off filing waiting for them.

I agree that one should follow his/her timeline and not hold hope on politics.

However there are two points to consider:
1) This would be an amendment to the law, not a whole new BK law.
2) The financial industry has ZERO political capital and credibility at the moment... it's a political pinata.

[bkadvisor]

HUH?

Zero credibility with Mainstreet.
It has billions left in TARP.

Andrew Cuomo was the stick that beat the AIG fatsos. I durn sure would give the bonus back after my name and location of my home was on every cable news network. There are lotsa' nutz out there with guns!

Heck we have a Treasury Secretary that flunked public speaking 101 not to mention filing taxes. He announces behind closed doors that the guvvies are going to buy the toxic waste. The greedy so and sos on Wall St jump. Who wouldn't....Chiti-bank zooms to $3+ and will climb more on our backs.

The bankruptcy laws are working in the creditors favor right now due to the over median income earners having to wait out the 6 month historical income meanies testing in order to be eligile for a Chapter 7.

Why is the bk 'cramdown bill' not signed yet? it is definitely a viable 3rd option to save people's homes.

What I foresee, though, in the years to come a credit rebuild will be easier as the historical number of bk filers will be too large a group to deny credit.

KARMA......

Additionally I viscerally feel the FICO paradigm must shift in order to take income into account instead of the willy-nilly acquisition of plastic.

Spending alone will not solve our economic ills. We need job creations...LOTs of job creations. As Americans we must return to our manufacturing roots.

Saving has to be a daily part of our lexicon.

There should be no sacred cows including NAFTA.......has anyone else noted a marked back off of this by the new admin?

Last but not least.....OINK, OINK, OINK....on the proposed budget.

THese are not my political views but just the facts, maam.

[keepmine]

The bankruptcy laws are working in the creditors favor right now due to the over median income earners having to wait out the 6 month historical income meanies testing in order to be eligile for a Chapter 7.


This isn't correct. MAny on this site are over the median and filing chapter 7's. The means test is only part one. You still must fill out schedules I and J to determine if you have disposable income to fund a Chapter 13.
In post #4 in this thread I provided a copy and paste of a recent articles showing Chapter 7 filings as a percent of bk filings is about the same today as it was prior to reform

[OhioFiler]

bkadvisor, you are wise.

[HHM]

Big picture, aside from having to do the consumer counseling courses and additional paperwork, it is only a very small percentage of people that could have filed a 7 in pre 2005 that are filing 13 post 2005.

For the most part, the people that file chapter 7 now would have filed chapter 7 pre 2005, and the people filing chapter 13 now would have have filed chapter 13 pre 2005. But BKAdvisor is correct, the 2005 law simply extended the timeline for when someone should file a BK.

Even pre 2005, expenses still had to be "reasonable". If you were paying $3000 month rent for a highrise condo, but the average rent in your area was $1,200, the BK would still disallow the expense.

[LuciluS]

My Attorney told me the Paperwork is so much longer after 2005 and those Post and Pre Bankruptcy Courses are so Farce.

Just what he told me as I wouldn't know...those were the Good Ole Days for me LOL!

Luci