REPEAL The 2005 Bankruptcy Law Petition

[jacturne]

I have started a White House petition to repeal the 2005 Bankruptcy Law. It has cause undue hardship on families who just want to start over. Sign it....tell your friends.

wh.gov/lNpxz

[Pjmax]

I have started a White House petition to repeal the 2005 Bankruptcy Law. It has cause undue hardship on families who just want to start over. Sign it....tell your friends.

wh.gov/lNpxz

Can you explain why, please?

[vee1]

You may want to put this on change.org or moveon.org as well.

[jacturne]

You may want to put this on change.org or moveon.org as well.

Done and done.

[jacturne]

Have you ever filed a Bankruptcy? The protections for creditors in this law is unjust. God help you if you would have to file a Chapter 13. Most of the payments you are making go to the lawyer for fees. There is no way an average person would be able to files or understand the Chapter 13 regulations so you have to file with a lawyer. Even once you emerge from bankruptcy you are not truly starting over, because the bankruptcy stays on your credit for another 7 years.

[nioka]

jacturne,

I agree that if the purpose of bankruptcy is to clean the slate and allow a citizen a fresh start then it fails. I think you need to explain more if you want full support. (Just a suggestion).
What kind of a "fresh start" is it that might as well tattoo your forehead with "bankruptcy, foreclosure, eviction?"
I think another approach would be to identify those politicians who voted for this current law and vote them out of office.

My personal gripe is the power given to HOA's in 2005. The general manager of the HOA I am unfortunately in when I questioned his power said, "we are above the law. We make our own rules and regulations and we enforce them as we see fit." When I spoke with an attorney he told me the man was right. How can this be in America? If you disagree with your HOA they can take your house? You bet they can and they can do for a few dollars to top all.

Good luck with your petition.

[bcohen]

The only thing which materially changed for most people in 2005 is the fact that private student loans are treated the same as federal student loans, which is highly unfair. The means test, pre-filing certification, and pre-discharge certification are basically just hurdles which waste your time, and force you to spend money taking two online courses which give out silly advice.

Most people who need to file for Chapter 7, and do not have assets to protect which would require a Chapter 13, can still qualify even with the means test. Most people who file for Chapter 13 do so because they need to protect a house, car or other assets, or limit wage garnishment for student loans or other non-dischargeable debts.

[keepmine]

Have you ever filed a Bankruptcy? The protections for creditors in this law is unjust. God help you if you would have to file a Chapter 13. Most of the payments you are making go to the lawyer for fees. There is no way an average person would be able to files or understand the Chapter 13 regulations so you have to file with a lawyer. Even once you emerge from bankruptcy you are not truly starting over, because the bankruptcy stays on your credit for another 7 years.

I'd suggest that everyone on this site with the exception of the lawyers that particapte here have filed bk.
Many of us have successfully taken advantage of the fresh start and successfully rebullit our credit. many have bought homes and cars and financed them at prime rates.
BTW, the BK Reform Act did nothing to change the length of time a bk is on your report.
If you've had trouble rebuilding, look at yourself.What steps have you taken?
I doubt very seriously that legal fees account for the majority of your Chapter 13 payments unless, you filed to cure an arreage on a mortgage.
Big thing about recovering from any chapter of bk is first, fix the problems that created the bk. If you can't do that, life is gonna be hard.

[Drazil65]

Hi, what exactly are you looking for that you are unable to do or start over doing? I mean it is a bankruptcy and its a chance to do things much differently than you did in the past financially. Many have filed pro se and many have started over with a new attitude and a big lifestyle change for the future. You signed the papers for the chapter 13 and you had a responsibility to educate yourself ahead of time as much as you could to become familiar with the process and the outcome. I guess we may need a few details on what exactly you are talking about and how it relates to the bankruptcy process.

Hopefully you are taking accountability and taking the steps to remedy any future situations that lead down this path in the first place. It can be as simple as leading a cash basis lifestyle or just having a savings account with an emergency fund in it for future life events beyond your control (job loss etc.). The best of luck...

[Pjmax]

If most of the payments YOU are making go to your attorney and trustee, I'm guessing you must have a very low percentage payback. In other words, you are probably paying pennies on the dollar to be relieved of your debt. You really don't expect the attorneys to work for free, do you? You are lucky you have the income to fund a 13, and I'm guessing assets that you will be allowed to keep.

Your BK 13 public record does not stay on your CR's for 7 years after you are done. It will be there for 7 years from date of filing.

Nearly everyone on here has, or will file BK. There are some here who filed a 13 pro se. It takes a lot of time to research, read and learn how to do it properly. You either put in the time and effort, or pay someone else to do so.

Even though it wasn't a problem for me, I would like to see the law changed that would compel a mortgage-holder to foreclose in a timely manner, after a BK is filed and the intention is to surrender the property. That, to me, is a serious issue affecting many. Yes, there are laws that should be changed, but I'm grateful for the BK process. I did without for awhile to pay my attorney, and my BK will be on my CR for a few years. It took a few years to get to the BK point, I don't expect an instant recovery.

[LadyInTheRed]

Have you ever filed a Bankruptcy? The protections for creditors in this law is unjust. God help you if you would have to file a Chapter 13. Most of the payments you are making go to the lawyer for fees. There is no way an average person would be able to files or understand the Chapter 13 regulations so you have to file with a lawyer. Even once you emerge from bankruptcy you are not truly starting over, because the bankruptcy stays on your credit for another 7 years.

In case it isn't clear from the other responses, you need to work on your argument. Most of my Chap 13 payments are going to pay off my car. My attorney has earned the portion he is getting. If he weren't getting paid, the unsecured creditors would get more. The 7 years starts on the day of filing. So, when I finish my 5 year plan, my BK will only have 2 years left on my credit reports. Having a BK on your credit report is not the end of the world and repealing the 2005 law will not change the effect of BK on your credit.

The only thing which materially changed for most people in 2005 is the fact that private student loans are treated the same as federal student loans, which is highly unfair. The means test, pre-filing certification, and pre-discharge certification are basically just hurdles which waste your time, and force you to spend money taking two online courses which give out silly advice.

That is a better argument why the 2005 act should be repealed.

If private student loans are not dischargeable, they should at least be required to offer the same income based repayment plans available for federal student loans.

The means test is arbitrary and unfair. The part based on median income makes no sense. The economy goes bad, people are out of work causing median income to drop so it becomes harder for people who do have jobs to qualify for Chap 7. A big portion of the remainder of the means test does not allow for actual expenses unless you claim special circumstances. So, somebody with necessary but out of the oridinary expenses is likely to get an objection from the trustee and have to fight to get a Chap 7 discharge. Somebody with a 401k loan is not allowed to use that as a deduction on the means test even though not paying it can have huge financial consequences. What makes that especially unfair is that most of those 401k loans were probably taken because people were struggling with debt and trying to avoid BK. The fact that you can't include contributions for your 401k is contrary to the public policy to encourage people to save for retirement.

Petitioning the White House is not going to do much. It will take congress to repeal the 2005 act. Moveon is probably a better place for a petition. You should also encourage people to write to their representatives in Congress.

[LadyInTheRed]

Instead of starting a new petition, you could encourage people to sign this one: http://petitions.moveon.org/sign/ove...?source=search

[TXskyblue]

That is a better argument why the 2005 act should be repealed.

If private student loans are not dischargeable, they should at least be required to offer the same income based repayment plans available for federal student loans.

I just wanted to comment on this point.

First, why should private lenders be required to accept less than they are owed?

Also, I think student loans (federal and private) should be dischargeable. The fact that they are not dischargeable is a major factor in why college prices have skyrocketed. Because they are not dischargeable, they are easy to get. Because they are easy to get, more people will get them and in greater amounts. Because there's so much easy money out there, colleges charge more.

If student loans were dischargeable, lenders would not give them out willy-nilly like they do now. They would not give them to people who pursue economically-unfeasable degrees like women's studies, African-American studies, sociology, psychology, etc, because they know they would be unlikely to ever be repaid. Students would shop around for education because they wouldn't be able to borrow as easily and the price of college would go down. We'd also get better students.

[LadyInTheRed]

I just wanted to comment on this point.

First, why should private lenders be required to accept less than they are owed?

Because they have the priviledge of being non-dischargeable in bankruptcy, unlike most other kinds of debt. Federal Loans may be non-dischargeable, but at least they offer an income based repayment plan.

Also, I think student loans (federal and private) should be dischargeable. The fact that they are not dischargeable is a major factor in why college prices have skyrocketed. Because they are not dischargeable, they are easy to get. Because they are easy to get, more people will get them and in greater amounts. Because there's so much easy money out there, colleges charge more.

If student loans were dischargeable, lenders would not give them out willy-nilly like they do now. They would not give them to people who pursue economically-unfeasable degrees like women's studies, African-American studies, sociology, psychology, etc, because they know they would be unlikely to ever be repaid. Students would shop around for education because they wouldn't be able to borrow as easily and the price of college would go down. We'd also get better students.

You make a good argument about the costs of education and how easily money is available (assuming your statements about the effect of non-dischargability are correct which I have not investigated although they sound logical). However, I don't like the prospect of students not being able to pursue degrees just because they are "economically-unfeasable". If student loans were limited to people whose desired areas of study were "economically feasible", we would discourage people who don't have the financial means to pay for college from studying to become teachers, social workers and other occupations that are valuable to society but don't pay enough. There is value to society promoting education for the sake of knowledge, rather than only for future earning potential.

I would prefer that all student loans be dischargeable, but can live with federal loans remaining not dischargeable as long as there are manageable repayment plans. Currently, for all federal loans other than PLUS loans taken by parents, if you have a "partial financial hardship", after 25 years of income based payments, the remaining balance is forgiven. For some federal loans, there is also the opportunity for loan forgiveness after 10 years for people who work in public service. None of that is available for private loans.

[kilowatt]

Hi, With a Republican majority in the House of Representatives there is no way that Bankruptcy laws will change. The republicans and democrats worked together to create the current bankruptcy laws. If you are truly poor you can easily qualify for Chapter 7 bankruptcy. However, if you are fully employed and took out lines of credit the majority in congress support making that person to use Chapter 13 bankruptcy to reach a settlement with creditors.