Why the new laws?

[jeff0633]

I was just thinking about this new law, and wondering why is the government making it harder for folks to use their right to file BK? I keep thinking that it's the ten years in between filing that should be enough to protect creditors. Seems to me that they should have simply changed it so that you could only file once every fifteen years and left the actual filing and laws as they were to make it easy for folks to use this right we supposedly all have.

Making BK harder and more complicated seems to me to be something that poor folks will be discouraged by, yet folks who can fork out a grand or more to pay a lawyer to do it don't really have much more trouble to begin with. I guess I just don't understand their thinking with these new laws. Filing and getting this done should be easy to do, it's the fact that you can only file once every ten years that should be the protector of creditors. If they wanted to discourage filings, they could have simply stretched that out to once every fifteen years. This would not have hurt only one group (those who can't afford a lawyer), but would have made everyone wait fifteen years between filings. It just seems they went the wrong route.

They made it harder to file and harder to get through it, and this seems like it will really hurt the poor folks who need to file pro se. The *right* to file should not be tampered with, yet when they have set more roadblocks in front of you, it's as if they are attempting to block you from using your right to file. What good is a right to file if they make it so hard that poor folks are afraid to even attempt it?

My point is, the actual process should be easy, because it's OUR RIGHT to file and get a fresh start. It's the ten years in between that limit filing, and that limits it fairly for everyone, doesn't it? No matter how easy it is, you can still only file every ten years, so why not make it 15 years? This would have also lowered the number of filings, but it would have done it fairly, accross the board.

These new laws seem to hurt and discourage the little folks from even using their right to file. I don't know, it just seems that they are trying to put roadblocks in the way so that the right given to us by our for fathers is too tough to use. What good is the right if they make it so complicated and scary that folks are afraid to even use the right?

And where are the laws to protect citizens from these vultures that charge 29 percent interest? I was just divorced, two kids, living at my Mom's, desperate for some credit to get a place of our own, so I was suckered in to Aspire Visa, 29 percent interest. Then, I had done everything right, and Aspire RAISED it to 31 percent. I would send a 55 dollar payment, and something like 40 bucks of the payment would go toward interest. basically, I was enslaved by these vultures. Where are the laws to protect me from such crooks?

It is illegal for con men to go to old people's houses and tell them that their roof is bad and they need a new one. This was a practice by some crooks before the government caught on to the scam, and now it's illegal.

Where are the laws to protect people in desperate situations from being sucked into slavery by these crooked CC companies? They also find the weak, the desperate, and prey upon them and enslave them. I probably paid back all the REAL money I borrowed from Aspire, but when 40 bucks of your 55 dollar payment goes toward interest.... Where was my protection?

How come the American people aren't fighting to get some laws changed that would help us folks who are being preyed upon by these vultures? When Aspire charges 31 percent interest, doesn't that make for more BK's? Why are the laws not changed to tell these vultures, "Hey, when you charge 31 percent interest you have no one to blame but yourself for having a lot of your clients file BK.

Where were the new laws discouraging BK's by saying these vultures cannot charge more than like 12 percent interest? This would also lower the number of BK's. It just seems as if they focused in on the worst part of the equation with the new laws.

They don't stop Aspir Visa from charging 31 percent interest, but they make it harder for their victims to file BK? Man oh man, what a bunch of good, family loving people they are. If they were going to change the laws, shouldn't they have done it fairly, accross the board? They could have said, yeah, we will make it harder to file and that will lower BK's, but we will also put a national cap on interest at like, 13 percent, and that will also lower BK's and stop these vultures from enslaving poor folks for 31 percent interest.

Somewhere out there today, there are thousands of young couples desperate for credit, and companies like Aspire will give them what they think they need, and next thing they know, they are enslaved at 31 percent interest and in a couple years they will be forced into BK, and then they find out that to discourage them from filing, all these extra road blocks have been put in front of them. Where are their protections in the new law? Where was the law that would have stopped Aspire from enslaving them at 31 percent to start with? That would have also cut down on the number of BK's.

Sorry for rambling.

Jeff

[BassBoy]

IMO, the new laws were supposed to ween out the deadbeats, I guess. For some reason, the lenders had this impression that BK'ers were out there racking up debt, with the intentions of never repaying and filing BK. Recent articles state that this backfired. Yes, the number filings decreased, but it's not as difficult as everyone made it out to be. I think only 3% of filiers were those who racked up debt with the intentions to file BK, and after the new laws went into effect, I think that number dropped to 2%. Don't quote on that though. My point is, that there are not as many deadbeats as "they" assumed.

As far as the interest rate set be CCC's, I agree that there needs to be a set standard they must abide by. People with not-so-good credit are being preyed upon, and yes, in some cases, being forced into BK. On the other hand, we must make the decision to accept the terms the CCC's set forth. If we don't agree, do not open the account.

Being an old law filer, I haven't totally familarized myself with the new laws, but from what I have gathered, the main scope for BK is the same.

[HHM]

This week, they are holding hearings in congress on the new law. And many of your sentiments are shared by much of the people. The creditor lobby will point to the fact that BK filings are way down this year indicating the law is doing what it was intended to do. However, the consumer advocates will point to that and say, that does not mean those people who are not filing do not need to file.

I tend to agree with the later position, making BK harder has only removed one possible solution to financial emergencies...it hasn't cured the underlying issues, i.e. criminally high interest rates, very expensive medical care, job loss due to economic transition etc. By analogy, if there were 3 antibiotics that treat a disease, the new BK law is like removing one of those antibiotics. One of the most telling facts is that, of those that take the pre-BK credit counseling course, roughly 95% still go on to file BK.

[BK&Filer]

The new laws were pushed by

the credit industry for years (and vetoed once by Clinton) before they finally became law. One of the biggest flaws I see in the new law (and I think there are many) relates to the means test. If you are going to try to classify people based on their income vs. median income, it has to be done at a smaller level than a state. For example in my state there is a huge variance between the median income in some of the northern sections and the median in the southwest corner of the state - but everyone is thrown into the same bucket.

[HHM]

the credit industry for years (and vetoed once by Clinton) before they finally became law. One of the biggest flaws I see in the new law (and I think there are many) relates to the means test. If you are going to try to classify people based on their income vs. median income, it has to be done at a smaller level than a state. For example in my state there is a huge variance between the median income in some of the northern sections and the median in the southwest corner of the state - but everyone is thrown into the same bucket.

Exactly

Politically, its unrealistic that we will see an wholesale change in the law, but if there was one aspect that should be modified, it would be to return discretion to the bankruptcy court to decide a case on its individual merits and not be locked into an arbitrary means tests.

[GoingDown]

Maybe with the Democrats in power, they can modify the new law, but I don't hold out much hope, because many of the dems voted in favor of the new law back then.

I am surprised that bk filings have dropped at all with the way housing expenses have risen exponentially over the past few years. I would have expected bk filings to rise as well.

[HHM]

Maybe with the Democrats in power, they can modify the new law, but I don't hold out much hope, because many of the dems voted in favor of the new law back then.

I am surprised that bk filings have dropped at all with the way housing expenses have risen exponentially over the past few years. I would have expected bk filings to rise as well.

You would think so...but housing problems and BK are necessarily related, mainly, because BK can't really help all that much with mortgage problems. I think the other reason BK filings have been lower, on average nationally, is the low unemployment. When someone is working, I think they think that they can hold out longer.

Have you been noticing on the news, that several sub-prime mortgage lenders have gone belly-up because of the increase in defaults in that category.