Barack Obama Proposes Bankruptcy Law Changes
In a speech to nearly 3,000 people in Powder Springs, Georgia, Democratic presidential candidate Barack Obama promised to reform bankruptcy law to make it easier for military families, disaster victims, and homeowners.
He acknowledged that Americans have a responsibility to pay their debts, but also recognized that struggling families need more help. In the past, he says, Washington has protected banks instead of American families in trouble.
Obama suggested a "fast track" process for military families that would eliminate the extra steps implemented by the new bankruptcy law in 2005. These bankruptcy filers would avoid the means test and mandatory consumer credit counseling.
In addition, senior citizens filing bankruptcy would receive protection giving them a better chance of keeping their homes.
What do you think about the proposed bankruptcy law changes? What more should be changed about the current bankruptcy law? Leave your comments.
Comments
The whole law was for the banks’ benefit anyway. They just couldn’t stand people being able to file and escape. I think the whole law should be thrown out. It’s not doing any good anyway…Bankruptcy filings and delinquencies are back to the level they were BEFORE the law went into effect…
Why do we need to show special favors to military families. Many of those people make
more in salary than the civilian population.
I would revamp the whole bankruptcy law and go back to the original. The only thing that I would require would be consumer credit coounseling.
Please note the the idea of helping military families concerns those who have been activated.
Imagine:
A: Being shipped out to a war zone.
B: While your life is in danger, your pay has also been cut 2/3. Don’t believe me? Ask those who have served in “activated” units. Be prepared for an earful!
Robert, you should thank God every night for the service men and women who put their life on the line so you can sleep peacefully.
The credit card “reforms” were bought and paid for by the credit card industry. Isn’t it interesting that I get more solicitations than ever now?
Check the fine print. They jack interest rates if customers are late on other bills that don’t even concern them. I’ve seen some than can go into the 30%+ APR range. Notice how the issuing banks are NEVER located in your home state, so usury laws don’t apply to them.
Some issuers even charge you a monthly maintenance fee. That way, if you’re not using the card you get 12 chances to be late every year, and pay late charges.
There need to be a national usury law that floats with the prime rate. In today’s interest rate market banks can be profitable at far less then 18 or 20%. Much less 30%!
Many of you are barely old enough to possibly remember the Savings and Loan debacle the Banks created. S&L’s (as they were known then) gave better interest rates on loans, savings accounts, and CD’s than Banks and the Banking industry finally BOUGHT enough politicians to pass a law doing away with the S&L’s. Now the Banks once again have BOUGHT enough politicians to create the next great problem with credit cards, bankruptcies, and loan rates that they can force you and me to bend to their will. It’s time we the American people took this country back from the special interests and political machines. How? First, lets have a NATIONAL referendum to disband the Electoral College. The computer systems we have today can tally the votes for President and we, not the politicians, can elect the next President. Secondly, outlaw any and all special interest lobbyists. What does a lobbyist do anyway? He buys the politicians to vote his special interests way. Third, OUTLAW all pork barrel legislation. If a bill is proposed it either is passed as is with only revisions pertinent to the original bill or it dies. No one would be allowed to add anything to the bill that does not directly pertain to the original bill. Lets make the politicians responsible to the people, not the people responsible to the politicians.
Hat’s off to Robert and Paul. As we can see – the banking cartel is alive and well. These economic hard times are not by accident. They are well planned and executed by the origins of bankers and offsprings, i.e. chase, bush, rockerfeller, inclusive of the offshore or international banker cartel. The problem is too many consumer’s are not aware of how this control of the economics ups and down originated .. Andrew Jackson gave the federal reserve the right to assassinate consumers financial – the federal reserve charges the government 7 cents to produce a 5 cent coin – go figure! The government pays the federal reserve interest rates – go figure. What do I think! Obama has his work cut-out!
We don’t need more or different laws, we need more responsible people. I know several who have declared bankrupcy more than once. Cut up the credit cards, live within your means, quit spending money on crap, make a budget and stick to it and start saving instead of spending. Is it a need or a want? Think about it.
I think it’s a great idea but what about students who have to take out all these loans to pay for college…I tink the banckruptcy law should change for them also…All these credit lenders are greedy, they dont give you a chance, they dont care if you’ve fallen on hard times and the same goes for the banks that lend for vehicles and such.
The biggest problem is that the banks, mortgage lenders and credit card companies own Congress. Through their lobbying efforts, creditors have made bankruptcy proceedings extremely onerous. When a consumer needs to start over as a result of foreclosure, job loss or other personal crisis (i.e. catastrophic illness or divorce)they should be able to do so without having to adhere to the more rigid Chapter 13 standards. Their credit will be adversely affected regardless of whether they “qualify” for Chapter 7 or Chapter 13; the question is whether or not they should be granted a clean slate. If Chapter 7 were granted more readily, consumers would be in a better position to begin spending on new goods and services, as opposed to repaying the debts that placed them in financial hardship. I am not suggesting that bankruptcy should be easy; it is an extreme decision that results in a longstanding blight and makes credit far more difficult to obtain. And once it is granted, it is usually under stricter terms, at very costly rates. Ironically, some of the very financial institutions that lobbied for harsher bankruptcy laws, now find themselves on the brink of insolvency. And the Federal government WILL bail them out. Why is the government so eager to help traditional and investment banks, and not their taxpaying constituents?
The Bankruptcy Law was the result of the pressure of Lobbies pay by Credit Cards Companies. This law consider that everybody not paying their bills is a shameless person filing only with nthe intention to get rid of the debts. Mr Bush did not review the abuse, tricks and tactics to predate form those companies failing to protect the weaeest from the predators, Thea law should be reviewed and not mingle the individuals with real reasons and hardships for filing with the crooks.
Gerardo
Florida has a marriage penalty on chapter 7 means test. Household of 1 can earn up to 40,035 while household of 2 can only earn up to 50,636. The judge can declare abuse even if you qualify. Credit Card companies lower your limit so it always looks like you borrowed the maximum and threaten to cancel your card if you pay them off. Meanwhile they all jack your rates up sky high to slave you for life… Thanks a lot Bush…..
I cannot believe what I am reading. Joe Biden is the one that put this new law into effect. Remember his state has all the credit card companies headquarters. Don’t blame this one Bush. Also where has the responsibilty of you own finance gone. The greed within yourself did this to you-not government. Quite frankly I’m sick and tired of paying for your behavior. I bet everyone of you have a better cell phone than I have. I paid for mine 4 years ago with cash. Spend within your means and you won’t get in trouble.
i think its a great idea. alot of people r losing their homes. n alot of people dont hve barely any money for food. we r struggling to keep our homes n i think obama has the right idea. but yeah want about students who r payin their loans. they cant pay for it that easy. i kno cause my brother is struggling to keep his house, job, and family. he has 3 childern n a wife. he has to support them n hes workin 3 jobs n sleepin very little. hes been payin his loan for 2 years n still payin. so obama has a good idea but he needs to think about students too. if i was old enough to vote i would vote for obama cause he has really good n different ideas.
signed,
14 year old =)
The 2005 Bankruptcy Law change was bought and paid for by the credit card financial institutions. The republican Party benefited along with a few old party democrats.
The rights and protection of the Bankruptcy Law prior to the 2005 change should be completely REPEALED!!.
The credit card companies have and are, using their power that was given to them by those paid off politicians to destroy families and take homes ,garnish wages, harass Americans,and did not lower the intrest rates from the windfall profits they made from the new Law. I think every American should be allowed at least 1 Clean Bankruptcy in their life that is absolute and without penalty.
Senior citicenze and the sick should be given special consideration and protection in this process.
The credit card companies charged enough intrest and penalties to incur the losses that they may have encountered due to the Right of Bankruptcy prior to the 2005 change in law and were being profitable in their endeavers without a change that Punishes the Unfortunate that were lured into the Credit Card Scheme.
I feel like the Chapter 13 Bankruptcy Law should be changed back to the original way, so that home mortgages can be modified. If you have an ARM rate, it do not help to file; because your mortgage payment continue to rise.
I think people need to recognize the difference between “credit” and “credit cards”. Credit, when it is extended, is based on an honest appraisal of risk and at rates that are generally controlled by state law. Credit card recipients are sought out by card issuers often via unsolicited offers with very little consideration of credit worthiness. The risk is offset by predatory rates (the National
Banking Act (NBA) allows the highest rate allowable in the state of the issuer’s incorporation), sanctioned and shocking penalties (late payments, over-limit, other debts, changes in pay/employment; for example), Bankruptcy Act restrictions on discharge of credit card debt, and a near total disregard of who actually signs the application.
I agree that restrictions on the discharge of credit card debt needs to be brought into line with consumer debts generally and in line with discharges granted to non-consumer petitioners. More importantly the NBA needs to be amended to either limit interest rates or put them under state control. If you can’t profit on 2+ % of sales and a maximum of 15% interest you shouldn’t be offering a credit card to the applicant. Similarly, penalties need to be limited. Issuers should be required to deny any purchase that is over the card’s limit. All applications should be required to be made in writing and contain a verified signature (meaning signed in front of a notary public).
This country is forking out billions of dollars to “protect” corporate irresponsibility and ignoring the consumer. Helping the consumer get relief from unreasonable, sanctioned, and predatory credit card practices would do wonders to stimulate the economy.
Bruce
They definately need to revert back to the 6 year waiting period between chapter 7 bankruptcies. Banks were fast to give out ARM loan less than a year outside of bankruptcy. Within a year and a half I had 4 credit cards with 2,000 + credit lines on them (originally started out with 4 cards with 500 credit lines. Banks helped put us in this situation, we should be allowed to use bankruptcy to get out. If you do not qualify for a chapter 13 (because you don’t make enough to pay back creditors) the wait period should be completely eliminated. At this point, I’m not sure but my family may need to move into a cheap appartment to qualify (currently we rent a house).
The idea of forcing you to sell everything to pay for a ridiculous credit line that never should have been granted in the first place is what gets me; temptation is temptation, when life sucks go shopping, for too many this is a fact of life. I’m guilty of having too much debt myself but most of mine had to happen to keep the house running when my mother got old and ill. Now I’m diagnosed with something myself that will affect my future. Credit card companies and banks need to have more responsibility for what they do. I read something the other day that said the economy issues we are having now can at least partly be blamed on the changes in the bankruptcy laws…under the old system a company could often reorganize, restructure their debt and keep operating whereas now that company has to be sold off. This country is stuck in quicksand and sinking fast, Obama would be best to declare a temporary (two years) stay on the new law and let the old kick back in for awhile so we can get out from under some of the problem. I’m not saying it’s ok to not pay your debts but the banks that give you ridiculous credit lines need to bear some of the responsibility too…they don’t lose anything they just take it off their taxes and everyone knows it. I’m sick of my tax money being used to bail out a pack of criminals who don’t even think they have to tell us what they did with our money.
it’s Joe Biden’s fault for changing the bankruptcy laws in 2005.
10’s of thousands of people will loose there homes, including me because of Mr. Bidens bad judgement.I think he got bought out by the banks and credit card companies.I voted for Mr. Obama, but just shuttered when he said Biden was his running mate.
At the last minute i voted for Obama,a friend of mine told me Obama is going to run the country, not Biden..
if Biden ran the country, he would make Chaney look like a walk in the park.
Heaven forbid.
This is 2009 and Obama is the new President.
We The People Need Help!!! We need Our Bailout!!!
The Bankruptcy Laws have to be changed to help us keep our homes and feed our families…
A lot of good comments here. And yes Obama should help to push through changes to the Bankruptcy laws. Many consumers who had home mortgage payments double and triple started living off credit cards and running up debt to cover the greater outgo of income. and yet not able to contribute to the economy because the had nothing left to buy needed items let alone a few extras. What needs to happen, well maybe Obama needs (if he can) to suspend current law allowing anyone to file now to get a fresh start. I know there are companies out there who are doing alternatives to BK so called debt-relief companies making a fortune on unfortunate people who have no other choice. Also I think Obama can authorize a freeze on collection activity for couple of years till this is worked out. And even ask for a one time purge of your credit record (upon request). Instead of giving the banks all this money to bail them out why not give every family that applies enough to clear there debt without declaring BK with the proviion they have to close the accounts paid by government. And forgive student loans for people (especially in critical areas, like education) Or at least let these loans be included in BK. All this would be able to put more money in the hands of consumers to buy goods needed and wanted, a real stimulus as it were. Bail out the people not the corporations. Let the credit industry make giving out credit cards and loans stricter following a BK. You get a discharge today and you have 25 offers for new credit in your hand within 30 days, maybe they should offer credit until you have cleared a bk off your credit record in 10 yrs. And shorten time to file to 5 years (between BK chp 7) for next 3-4 years while we recover. Then make it progressive, 1st bk to 2nd bk 5-7 years, 2nd to 3rd 7-10 years and make maximum of 5 filings in life time (with extreem exceptions) and for God sake get rid of the need for spending $3K – $5K for a Bankruptcy attorney on chp 7 or 13. If you can’t pay your bills how is it you can pay for an attorney. I do agree that consumer credit counseling course is needed, but you do realize that all you have to do is pay $50 and spend 10 minutes on-line to get it done. It should be more to it. All just ideas we all have if it doesn’t get in the hands of our representatives.
I read all these comments sum make sense and sum do not. I am 28 years old and hears how I got screwed. It started when I was 19 me and my gf had a kid (we needed money for a place to live furniture etc)we had a payment plan worked out. I got laid off she lost her job. couldn’t pay the bills. interest rates went up. well we got new jobs. started 2 pay our bills again but by this time our interest rates were thru the roof so we made minimum payments. giving a little extra when we could it wasn’t enough. I found out what the little scam of debt to income ratio was the hard way 12% to 33% on $5000. screwed again. Well we managed to scrape our monthly payments. keep in mind we don’t live la Vida loca we have 2 cars( both paid for) a 2000 neon (crappy) and a 1990 wagon with no heat and barely runs. I rent a apartment we have Comcast triple play the cheapest one we have cell phones (minimum family plan and we get the free phones every 2 years ) so cant say we live great. well now hear we are in a depression oh joy! yup I’m laid off again and now I’m behind on my credit cards looking into credit solutions one of those relief agencies. well I hear they don’t work bbb gives them a f rating. Cant get a loan no collateral. don’t own a home no mortgage loan addition. file bankruptcy looking into don’t want to but, I guess its the Americans fault we get scammed by corporations but yet they get bailed out and have 800 thousands dollar vacations and here I sit sometimes living on 40$ for groceries for my family. cant get any assistance make to much according to the state. well that’s all I have to say but hey keep giving those top executives millions of dollars I’m sure they need it more than us working class Americans that just keep getting ripped off!
Why not just make it simple. We all know Bush’s agenda was to prevent the middle class from filing bankruptcy as a whole, so his banking buddies could feed him favors in kickbacks. Nixon looks like a saint compared to this clown. Anyways, if the point of Mr. Bush’s lie, oops, I mean Law, was to prevent misuse and abuse of tbe bankruptcy code…..then just make it so you can only file once in a life time for personal bankruptcy. Once for ch 7, once for ch 13. If you haven’t learned how to handle money by then, you don’t need credit and you are abusing the law.
I personaly do not think that the law should protect Military families for one they can get more assistance and help just because they are military families. I do think that is should protect middle class citizens who make to much money for government help but not enough to make it in the financial world.
And also not to get me wrong i support our troops 100% and i thank god everyday that they go out there and fight for our freedom. amd its not even just them i do not think that the law should help people who are on welfare either because i personally know a lady that quit her job and had two kids so she could get child support and government support. and that is very wrong i think you shoud atleast try to help your self !
I agree that this at the time 2005 it may have been a good Idea , However given the past 3 years of economic woes , this should be reversed to the original Law before changes were made . How else can anyone start fresh after unexpected finacial troubles ie ; Credit rebuilding process to be able to obtain Credit, Limited consumers without 620 Beacon Score or Coming out of current Bankrupy Restucture Program and still unable to obtain Credit . President Obama , YES YOU CAN!!! Please help the American People for a CHANGE !!!!!!!!!!!
We are being forced to file bankruptcy since my husband and i lost our jobs 10 months ago and we still have not found full-time work. We have used almost all our retirement income. We now face bankrutcy and foreclosure. A bankruptcy attorney told us we will now lose our cars and our boat which was a retirement dream because Florida law only allows 1,000 exemption for a car. I have a 2004 jeep that is paid for and my husband has a 2008 Ford that is paid for. Isn’t it ashame that Americans work hard all our lives and because of the economy ~ we are forced to lose it all. Please help us Obama. Florida and other states need to change the bankruptcy law for the next few years and give us Americans the break and the help we so deserve.
I feel the bankruptcy law should be form to benefit all people, not just military families and senior. Every class of people are struggling!!
I feel that if a family is overwhelmed by debts regardless if they make 20,000 a year or 100,000 a year, if you are bankrupted; you are bankrupted, and it’s not fair that some get a second chance instantly with a Chapter 7, while others have to struggle for 5 years with a Chapter 13!! Especially, if they are senior citizens. This could mean paying back with a Chapter 13 bankruptcy for the rest of their lives!!!
I think that bankruptcy should have at least a 4 year period between each bankruptcy not 8 years
Two and half years in chapter 13 I don’t have food in refrig.every thing goes to court late fees,home inspection fees,there lawyer fees,my lawyer fees court fees trustee fees this other fee never know what that is for,house is only debt I had after husband cancer death,if we could just pay what we owe maybe a little more but 20,000.00 more when its over with maybe more and your not even done when your out of bankruptcy they can add more keep helping the crooks cause it will never change.