New Bankruptcy Laws are not working out

http://www.moneysavingfreetips.com/new-bankruptcy-law.html you can read the full article here

"A study done on tens of thousands of consumers who are trying to seek bankruptcy protection after the new bankruptcy law was put into place in October 2005, found that the new law is not working out as intended.

The study carried out by National Association of Consumer Bankruptcy Attorneys (NACBA) found that of the 61,355 consumers who were asked to seek help from credit counseling firms in paying back their debts, 97% of them were not able to pay even little amounts. Under the new bankruptcy law, credit counseling is one of the first required steps that consumers must undergo, in order to proceed with their bankruptcy filings.

The study also found that almost 4 out of 5 consumers were not declaring bankruptcy to dodge and do away their debts. Unavoidable circumstances such as death of a spouse, loss of job or huge medical bills and expenses were some of the reasons."

shocker

That is true... I don't want to "dodge" my debt!My problem is I have a judgment against me, and now I owe back taxes for '05. I'm in no posiition to pay off the judgment and the taxes I would surely end up being evicted from my place ans have no where to go.

Doesn't surprise me...

There was nothing in the law that would help the average american employed, nothing in the new law to keep marriages together, nothing in the law to decrease medical expenditure when a crisis arises...

When they take care of some of those issues, THAT is when bankruptcy rates will fall... It doesn't seem that hard of a concept, instead of spending millions on this new law, they should have dumped the money into programs that the average american could benefit from to keep us out of this mess!

Very true... People who f'd up and are now trying to do the right thing are the one who really take it up the bum on this. If I would have hit the lottery or something we wouldn't be having this conversation right now. :)

Doesn't surprise me...

There was nothing in the law that would help the average american employed, nothing in the new law to keep marriages together, nothing in the law to decrease medical expenditure when a crisis arises...

When they take care of some of those issues, THAT is when bankruptcy rates will fall... It doesn't seem that hard of a concept, instead of spending millions on this new law, they should have dumped the money into programs that the average american could benefit from to keep us out of this mess!

AMEN HopeinHorizon. Don't forget, they also did nothing to address the crack pushing credit card industry in putting any financial reponsibility back to them. Ungodly credit limits, being able to change the rate and terms after the "loan". The "reform" was simply to shoot at all the ants with a laser cannon instead of just going after the one or two bad ants in the colony.

There's also this blog stating the same thing:

http://blog.startfreshtoday.com/archives/cat-bankruptcy-news.html


This answers a lot of our questions regarding what's reasonable after you pass the means test.
"Additionally, since the old system wherein the Trustee could examine expenses for reasonableness on a case-by-case basis has given way to statutorily permitted expenses, many debtors end up with no disposable income—on paper, anyway."



Hildebrand suggests that the consumer credit industry, after years of lobbying for this kind of reform, may turn out to be BAPCPA’s biggest victims.:yahoo:

This new law could back lash on consumers for years to come also.
With the ungodly prices of fuel and heating costs for the home, then coupled with credit card minimum payments nearly doubling, the consumer who may be just ok right now will find themselves in trouble some time down the road.
The process for filing is now longer and tougher standards for most. Although it may not hinder their abililty to file bk, it will take them longer to complete the process and cost them more $$ they already don't have.

Rising prices of EVERYTHING - gas, food, insurance, taxes, interest rates, etc in the future will force many to file bankruptcy WHO NEVER DREAMED they would have too......

Even those that are considered "well off" are going to feel the pinch!!!

And those from paycheck to paycheck or just comfortable will feel it bad...

We actually have not yet seen the fall out from higher fuel. Cnn keeps talking about fuel going up, and I believe it will. I fully expect to see fuel at somewhere between 3.50-4.75 in the next year. I seriously doubt the oil co's would price at 5.00. That is where I think consumers would start to revolt, and they are well aware of that. The real fall out will come with home heating costs. My living in an rv idea is looking better and better :). I do not believe that the American middle class can sustain the coming pricing. Maybe I am incorrect, but I just do not see how.

With the climbing interest rates on cc if late on payments - people who used to charge airfare, gas, etc will not be so quick to do it for vacations this year.... they'll stay home.....

Right now a plane ticket is rediclious (can't spell) especially with all the "hidden fees" we don't see added too them.....

Anything that is delivered from one place to another will create a price increase.....

Middleclass America is just that "middle class" - they are comfortable but still have limitations in their budgets..... When the rising costs cut into their "spending money" - they too are strapped for funds!!

Between job losses (and they can say all they want about the hiring/new jobs) - large companies moving overseas, rising prices (everything) SOON there will be no "middleclass America".......

It's coming and its not far away.............

I believe it is estimated that 70% of people live paycheck to paycheck. Getting back and forth to work will push those 70% over the edge, perhaps not bankrutpcy, but that new designer shirt they want, that bottle of wine they like, that vacation they were going to take this summer....gone. People will begin either only buying what is necessary or keep charging them cards up until they are forced to file bk.

I am afraid we are on the road to a very deep recession.

All these thoughts are so true. The sad thing is that most people don't or won't accept that it may happen to them. We've all already been there, done that and been ran through the wringer. The result being we are now much wiser and tighter with our dollars! Many, many are still running up the credit cards and spending on things they don't need. Meantime prices of everything is rising and rising, trapping these people in the cycle of debt that almost always leads to bk. The road will be much tougher for these people. as laws get more strict.

I think I'll be buying a lot more Top Ramen and Mac'n'Cheese if the price of gas goes any higher.

I think we are soon to see a shift in attitudes in America concerning housing. For many years, many Americans have aspired to own a "McMansion". That, of course, is what all of the builders have been building. It is not uncommon to see neighborhood after neighborhood full of 3,000+ square foot homes. Now, I ask you if oil is to go higher and gas goes to 4/gallon, how will people heat those homes. Could there be alot of "for sale" signs on the horizon. Thoughts??

I'd lived in so many 500-700 square foot aparments, that buying a 1400 square foot townhome seems quite luxurious! And I even have a basement and a 2 car garage and a tiny patio--what more could a girl ask for!? I really don't feel that I can re-adjust my living style since I bought my place for $110K--it's impossible to buy anything for that now. And paying rent would be more than my mortgage. About the only things I feel are the extras I spend on right now are DSL (which I also use for work) and DirecTV (we can't get regular channels on antenna where I live.) If I took away those 2 things, I guess they could say I'd have $100 a month for Ch 13.

~K

I read today about how some adjusters have grossly inflated prices of homes. Now that things are headed the other direction these people are in trouble and losing their homes to the banks and forclosure. It's all another sad chapter in the story where people's hopes and dreams are stolen by the greedy ones out to make a dollar. This goes hand in hand with the credit card companies and oil moguls who are out to take everything they can get from hard working people.

If things continue, there are going to be a lot of people that are forced into filing bankruptcy because they can't survive.....

I was very embarrassed over having to file bankruptcy. My neighbors did not know till the auction sign went up in the yard that I had filed. I learned then that 4 of my neighbors had already filed in the past 2 years..... and they had kept their homes in their bankruptcys - so I never knew!

These are all families whose income range from 20,000 to 50,000 a year....
Some that had gas fireplaces installed - took them out and went back to wood... (They could afford to buy $200 worth of wood but not the $1200-$1500 it would cost just to enjoy their fireplaces in the winter time (besides their electric heating bills.

Sad, but many are going to loose it all in the future, that they have worked so hard for.... Yes some of them have over-extended themselves I'm sure... indulging themselves..... and the paybacks are going to be an "eye-opener" for them...

I believe we will see a big decline in the housing market and lots of house up for sale..... in the near future.

Minny

My husband and I too were totally embarrased and just beside ourselves over having to file bk. I'd worked at the same job for 17 years when medical problems coupled with the birth of a new baby forced me to either quit work or be buried six feet under within a few years. Of course having job security for so long and losing my income had simply put us in debt too far to recover.
We've suffered endless trauma over the whole thing, but I've learned to ignore those who think it will never happen to them. Shame on them. Life's circumstances will catch anyone off guard just when they least expect it.

Welcome bkadv,

I never in a million years thought it would happen to me either. I have suffered severe depression and anxiety over all of this. My bills were never late, had a high credit score. excellent employment and now this. One never knows what is around the corner. I just love the primadonnas that think it can never happen to them. I happen to know a few!

I have also had severe depression and anxiety over all of this. I try very hard to keep a smile on my face, crack jokes, and do for others, but it is so hard. Especially when all I hear my dad talk about is how well my brother's business is doing and how much money he's making, the trips he takes, etc. In my family of origin, success is strictly defined by income and financial portfolio. This is so hard. It is hard sometimes not to feel inferior to my brother when it's flaunted in my face. I know it is tacky for them to do that, but it still hurts nonetheless.

I have to keep telling myself that we did the right thing for us and pray that my brother doesn't have to go through this and eat his words.

AHMEN

JANE TAYLOR,

In the future, many of our family members may be "eating their words" whether they want too or not..................... they may not have a choice.....

I may be the "black sheep" of the family - but at least I'M NO LONGER IN THE RED!!!!!

Now I can live from day to day and enjoy life, sleep at nite, and feel secure that I'm gonna be okay with my life now......

I feel like I'm back in control of my life now..................

Minny

I hope and pray none of my family members have to face what I'm facing now. My brother is a farmer, it could easily happen to him, but think he is set up pretty good now. My youngest sister married money. My oldest sister is dirt poor, and should file BK if she hadn't. She gave one of her kids a credit card to use in case of emergency...well, she got the old phone call one day telling her she owed 20k and wondered why she wasn't paying on it. As far as I know my neice still isn't paying her for it....my sister is.

Well,............... Hubby told his parents tonight. He decided it was time and told them himself. Alone.

He can't tell me what was said. Not won't, can't. He said it was indescribeable. He seemed shell shocked, said they were wierd, and I woulda had to have been there.

So I really don't know how it went. I'm guessing odd, at best. Only time will tell. :unsure:

Well,............... Hubby told his parents tonight. He decided it was time and told them himself. Alone.

He can't tell me what was said. Not won't, can't. He said it was indescribeable. He seemed shell shocked, said they were wierd, and I woulda had to have been there.

So I really don't know how it went. I'm guessing odd, at best. Only time will tell. :unsure:

His parents are probably reacting similiar to what my mother would if she knew. They are probably setting there asking themselves what they did wrong when they raised him and /or trying to put the blame on you somehow. Why did he feel compelled to tell them?

I will never tell my mother, she and I will go to our grave without ever having that conversation. My dad has already passed on, so he probably already knows....and I figure he is trying to help me.... Someone is making these few dollars I have left stretch out.