Obama Proposes Bankruptcy Changes

[WhatMoney]

The Democrat said he also would help service members and military families struggling financially after multiple moves, lengthy deployments and, in some cases, predatory lenders, saying, "If you're protecting America, America should be protecting you from unfair bankruptcy laws."

He pledged to expedite the bankruptcy process for them by exempting them from a "harsh means test," cutting "unnecessary paperwork" and "token counseling," and enacting a minimum homestead exemption to help them keep a greater share of their home's value.

Obama also wants to allow a speedier bankruptcy process for all service members regardless of what state they live, a departure from current law that says people can use federal bankruptcy exemption laws if their state of residence allows. Some 35 states bar families from federal exemptions, according to a campaign-issued fact sheet.

As for seniors, Obama said, "I'll help make sure that if you're over 62 and facing bankruptcy, you'll have a better chance of keeping your home."

He said people in that age bracket would get a minimum federal homestead exemption equal to the median cost of a home in their state, "giving them a better chance to keep their homes and helping them maintain both their independence and their financial security."

In addition, Obama said he would help families recovering from a natural disaster by streamlining the bankruptcy process for those in certified natural disaster areas by eliminating "unnecessary paperwork" and waiving "unneeded credit counseling requirements."

He also promised to enact a 120-day moratorium "on adverse credit actions from collectors, such as foreclosure" to free families from concerns about collectors as they are trying to recover. And, his campaign said he would amend the Equal Credit Opportunity Act, which bars discrimination in lending, to include protection for disaster victims, so that lenders do not unfairly restrict credit to such families.

By LIZ SIDOTI, Associated Press Writer
Tue Jul 8, 11:25 AM ET

http://news.yahoo.com/s/ap/20080708/...UuKVPuw4Os0NUE
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[Cassiopeia]

Well. Another reason I just love Obama!

[Gauche1967]

Not a stitch about reforming the irrational bankruptcy laws concerning the discharge of student loans? Come on Obama! Hillary proposed to make them dischargeable after 7 years again and Dick Durbin has proposed making private student loans dischargeable. Get with the program Obama!

[justplaintired]

I knew I wanted him for president, now I know I am making the right decision. Someone who sees how unfair the new BK laws are and what crooks cc companies are, maybe he can help save our country, or atleast give us a fighting chance!

[banca rotta]

Not bad! Why else should we vote for a president?

[JRScott]

If he's so fired up folks to change bankruptcy laws, then why as Senator of Illinois has he not introduced such legislation into the Senate? He has the power now, later he only has the power to request Congress to do it and then whine if they don't do it.

[BK2008]

So...if you're not a Senior Citizen or Military, what happens to the millions of folks suffering now??

Not against helping out the 2 groups, but a more level playing field would be nice for the lower income folk that ultimately pay for all the programs & services the US offers.

[WhatMoney]

If he's so fired up folks to change bankruptcy laws, then why as Senator of Illinois has he not introduced such legislation into the Senate? He has the power now, later he only has the power to request Congress to do it and then whine if they don't do it.

Why?

1) Because Bush would veto any reform bill.

2) Once Obama is President only a simple majority Senate vote is needed.

2) The Democrats only have a 1 vote majority in the Senate now, and it takes 67 votes to override Bush's veto. With ALL Republicans voting for the 2005 bill along with 18 Democrats, there is not the support for a reform bill this year. It would be a wasted effort. If at least 16 Republicans can get the boot this election and be replaced with Democrats, there is a good chance a majority vote for a reform bill would be there. And you don't need a 2/3 majority if you don't have a Republican prick in the White House ready to veto any bill that benefits the poor and middle class.

[JRScott]

Why?

1) Because Bush would veto any reform bill.

2) Once Obama is President only a simple majority Senate vote is needed.

2) The Democrats only have a 1 vote majority in the Senate now, and it takes 67 votes to override Bush's veto. With ALL Republicans voting for the 2005 bill along with 18 Democrats, there is not the support for a reform bill this year. It would be a wasted effort. If at least 16 Republicans can get the boot this election and be replaced with Democrats, there is a good chance a majority vote for a reform bill would be there. And you don't need a 2/3 majority if you don't have a Republican prick in the White House ready to veto any bill that benefits the poor and middle class.

In his campaigning, well his and McCain's, they have both claimed they could reach across the aisles and get legislation passed. However other than the McCain-Feingold mess and the failed McCain-Kennedy bill there is no real effort by either of them.

Almost 90% of what they claim they want to do as president rests in the power of the legislature, which both are members currently. Yet neither of them use that appropriate place to introduce the legislation they claim they want. Congress moves very slowly, even if introduced today it is unlikely it would see a vote before the election. Why not get the ball rolling?

Things have also changed greatly you might see many R vote for such a bill. The thing is the Democrats don't want to give them the choice. Its the typical partisan politics of both the R and D. They will do nothing that makes the other party look good, and will do nothing in an election year which might lose them votes.

[WhatMoney]

So...if you're not a Senior Citizen or Military, what happens to the millions of folks suffering now??

Read all the article - there are other reforms:

bankruptcy reform agenda that includes changes intended to help people in financial distress because of medical bills and allow homeowners going through the bankruptcy process to renegotiate terms of their mortgages...

He also promised to enact a 120-day moratorium "on adverse credit actions from collectors, such as foreclosure" to free families from concerns about collectors as they are trying to recover. And, his campaign said he would amend the Equal Credit Opportunity Act, which bars discrimination in lending, to include protection for disaster victims, so that lenders do not unfairly restrict credit to such families.

Also the AP article failed to mention medical costs for some reason. Here is the same story as written by Reuters:

(Reuters) Democratic presidential candidate Barack Obama proposed overhauling bankruptcy laws on Tuesday to ease the impact on people unable to pay their bills because of medical expenses or military service.

Obama, an Illinois senator, took aim at a 2005 overhaul of bankruptcy laws, which was strongly supported by credit card companies and other consumer lenders, that made it tougher for people facing personal bankruptcy to discharge debt.

"I'll reform our bankruptcy laws to give Americans who find themselves trapped in debt a second chance," Obama said at a town hall event in Powder Springs, Georgia, outside of Atlanta.

"While Americans should pay what they owe and we should be fair to those creditors who were fair to their borrowers, we also have to do more for the struggling families who need help the most," he added.

The 2005 bankruptcy law was passed by a Republican-led Congress and signed by President George W. Bush.

Obama and Republican John McCain, who will face each other in the November election, have been squaring off this week over the economy as they court voters who are increasingly anxious over soaring energy costs and a deteriorating job market.

SEEKING TO LINK MCCAIN TO BUSH ON ECONOMY

Obama has sought to link McCain, an Arizona senator, to Bush's policies on the economy, which the Democratic candidate contends have favored the wealthy and left the middle class struggling.

He accused McCain of having "sided with the big banks" to support the rewrite of the bankruptcy laws.

Obama said about half of all personal bankruptcies result in part from the burden of high medical expenses.

He said he would change the law so that Americans who can prove their bankruptcies resulted from high medical costs could get some relief from their debts.
Obama would also create a "fast-track" bankruptcy process for people serving in the military and their families who get behind on expenses because of long deployments, repeated moves and predatory lenders.

"If you're serving our country, you should be protected no matter where you live," Obama said.

In addition, he would make it easier for people over 62 to keep their homes if they are facing bankruptcy and give some relief to people burdened by bills because of a natural disaster.

Amid worries the U.S. economy may be sinking into a recession, personal bankruptcy filings are on the rise.

Such filings jumped 30 percent in the first six months of this year compared to the same period in 2007, according to the American Bankruptcy Institute, a research organization.

Rising mortgage costs in a slumping housing market and high levels of other household debt led to the jump in bankruptcy filings, the institute said.

By Caren Bohan
Tue Jul 8, 11:18 AM ET
http://news.yahoo.com/s/nm/20080708/...WjjgDQKJ0b.3QA
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[banca rotta]

No matter how you look at it whichever candidate wins, this time next year it will be more of the same. I wouldn't count on the next president to improve any of your lives. Only you can do that.

[Birn]

No matter how you look at it whichever candidate wins, this time next year it will be more of the same. I wouldn't count on the next president to improve any of your lives. Only you can do that.

Amen!!! You are so right. People voting for Obama are just falling for his typical political lies. He's just going to tell you what you want to hear so you'll like him and vote for him. He won't tell you the truth. There's nothing he's going to do that's going to make a difference in any of our lives. Pres. Bush was never going to do it and neither is anyone else. The fraud of Obama is that he has no problem lying to people about what he'll do. He just wants to get elected.

[Cali]

BK2008 - And you don't think the military pays for this as well? Last time I looked we pay taxes too. And we are underpaid for the job we do.

WhatMoney - If Obama was really that concern he would have brought this to the Senate, regardless of getting vetoed by Bush.

I found it funny that people actually believe everything a candidate says they are going to do. There is no way a President will do all that he states in 4 yrs. And many say whatever to get elected.

And before you ask, I am not a Rep.

[WhatMoney]

An amazing amount of negativism and defeatism among so many of these replies. Is it it your bankruptcy and financial problems that make you all feel so hopeless and cynical?

I just reported a relevant bankruptcy story in the appropriate thread. I've never said nor does it matter what I may think.

[banca rotta]

BK2008 - And you don't think the military pays for this as well? Last time I looked we pay taxes too. And we are underpaid for the job we do.

WhatMoney - If Obama was really that concern he would have brought this to the Senate, regardless of getting vetoed by Bush.

I found it funny that people actually believe everything a candidate says they are going to do. There is no way a President will do all that he states in 4 yrs. And many say whatever to get elected.

And before you ask, I am not a Rep.

For the record before anyone asks me, I am "a-political". The party no longer means anything! George Bush tried to please the liberals (except for the bk laws) and he pretty much pleased no one except for illegal aliens and big banks. A-POLITICAL! USA first!!!!