Storm Victims May Face Curbs On Bankruptcy
[NY times link] When Congress agreed this spring to tighten the bankruptcy laws and crack down on consumers who took on debt irresponsibly, no one had the victims of Hurricane Katrina in mind.
The law was intended to keep individuals from taking on debts they had no intention of paying off. But many once-solvent Katrina victims are likely to be caught up in the net intended to catch deadbeats.
Right after Hurricane Katrina struck, several lawmakers - mostly Democrats but including some Senate Republicans - suggested that storm victims along the Gulf Coast should get relief from the new law's stricter provisions, which are intended to screen filers by income and make those with higher incomes repay their debts over several years. Under the old law, which remains in effect until mid-October, many more filers can have their debts canceled quickly in federal bankruptcy courts.
But House Republicans, who fought off a proposed amendment that would have made bankruptcy filings easier for victims of natural disasters, said there was no reason to carve out a broad exemption just because of the storm.
“...no one had the victims of Hurricane Katrina in mind…”
Bullshit. For the NY Times to pull a Bush "no one cold of imagined this..." is absolutely, fucking outrageous.
Perhaps they didn’t know what the name of the hurricane would be, but plenty of people had exactly this kind of scenario in mind when tring to stop this odious piece of corporate shit legislation. Natural disasters and a whole host of other unfortunate situations beyond the contol of people in financial straits are now meaningless, and those folks are shit out of luck.
Hurricane swept away your life? Tough. Guard or Reserve family decimated by the breadwinner being deployed in Iraq for nineteen months? Thanks for your sacrifice, get lost. Giant medical bills because you left a goddamn leg in Fallujah? Too fucking bad. You had cancer and had to stop working? Cry me a river. Someone stole your identity from a negligent credit company and ruined your life? Hope you can work that out...
Of all the crap to come down the pike in the last five years, this Bankruptcy “Reform” is, to me, the most personally offensive.
What happened to the Republican motto of "the market taking care of itself?" The lending industries are pushing too much credit on too many people who are poor risks, and they should pay the price for that business model, not be bailed out by the goverment with custom-legislation that fucks over tons of people with legitimate claims just to nail a few deadbeats.
Most Democrats were on the right side of this issue, and this should have been something to hammer the Republicans with next year. This is the real life consequences of the corporate sell-out of our government staring the country in the face. There's no pretending this was unforeseen. They ALL knew about it. So why isn't this an issue we can use? The problem is that too many Dems crossed over on this, giving this abomination the cover of "bipartisanship." Here's what I wrote in April:
There was no good reason for any Democrat to support this. Period. There was nothing "bipartisan" about this Bill. Republicans struck down every single possible amendment offered by the Dems that could have taken some of the edge off this horrendous bill. Often by a party-line vote. As result, the Democrats should have banded together and said, "Fine. We don't want our names on this thing, it's all yours." Why? Because there is not one single Democrat or potential Democrat voter in this country supporting this thing. In fact, I'd bet there aren't too many Republicans either. The only people who wanted this were the lending industries...
In 2006 it would have been nice to hang this anvil around the necks of the "Republicans who choose big business over regular Americans", but that can't happen as a nation-wide, Party message thanks to these 73 corporate whores. Thanks a lot for making defining our Party versus the Republicans a near impossibility. Fuck.
And If Joe Fucking Biden thinks I will ever vote for him after pushing that Bill, he's got another thing coming. And that goes double for Debbie Stabenow here in Michigan. She is dead to me. I hope everyone who's name is on the "yea" list goes down over this. They deserve nothing less.
1 comment:
Great rant. I took the liberty of giving it a plug.
As I said there, I'm a collection attorney, not notably all warm and fuzzy on the subject of how people got into debt in the first place. My primary concern is more practical. Maybe the difference is the sorts of debts I pursue, but it is very, very rare that someone I'm chasing has any significant income or assets but gets off the hook by filing Chapter 7. I wonder if the folks pushing this law have actually run the numbers to figure out if they'll make any more money because of it. Or maybe it was some higher-up with no clue how things look on the ground who just takes as a matter of faith that if you make more people pay into a Chapter 13 plan, you'll collect more on your particular debt. As a theoretical matter, it certainly sounds logical. But, just from my perspective, it doesn't seem like there is any more money to wring out of these folks. You'll probably be forcing more people into the social safety net, such as it is. Not to mention, the failure rate of Chapter 13s are pretty significant as it is. That is only going to increase. So, you'll have a lot of time and money wasted getting these Chapter 13s started only to have the bankruptcy dismissed with no discharge, putting the debtors and creditors back in the same position as before the bankruptcy was filed.
I also tend to think that the bankruptcy law will make the next recession tougher to shake off. Your typical small business owner has to sign personal guarantees for any credit extended to his business. Recession comes. Business goes under. Business owner is on the hook for the business debts. Now, instead of being able to get a fresh start after a few months through a Chapter 7, he'll have the anvil of a Chapter 13 hanging around his neck for 5 years. There are probably going to be a lot of entrepreneurial types alongside the genuine deadbeats in Chapter 13 plans.
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