Bankruptcy legislation close to passage.

[katinmn]

http://www.consumersunion.org/pub/core_financial_services/001988.html#moreMarch 1, 2005

Dear Senator:

We at Consumers Union, the non-profit publisher of Consumer Reports ®, strongly urge you to reject the bankruptcy legislation currently pending on the Senate floor. Contrary to the claims of its sponsors, the legislation is not narrowly focused on bankruptcy abuses. Rather, it makes sweeping changes to bankruptcy law that could severely alter the protections currently afforded hard-working Americans who encounter legitimate financial problems.

Much evidence suggests that rising consumer bankruptcies are tied to abusive lending practices by creditors. Yet this bill does nothing to address this fundamental problem.

http://www.startribune.com/stories/1608/5271099.html
Star Tribune graphic on personal bankruptcies

http://www.nytimes.com/2005/03/03/opinion/03thu3.html?th
EDITORIAL
Bankrupt Bankruptcy Bill

Published: March 3, 2005

With their strengthened majority, Senate Republicans have high hopes of finally legislating more stringent demands on harried credit-card consumers who seek relief through personal bankruptcy. Proponents focus on tales of materialistic families of mall rats who max out their charge cards and fecklessly file for bankruptcy to start anew. The truth is far more complicated - particularly for low- and middle-income families driven to bankruptcy by catastrophic medical expenses. But the overhaul bill under debate, long sought by banks and credit card companies, would ratchet up the collection powers of an industry that blankets the nation daily with aggressive offers of consumer credit.

[rodeodance]

1. hypocracy at its best

.......But the overhaul bill under debate, long sought by banks and credit card companies, would ratchet up the collection powers of an industry that blankets the nation daily with aggressive offers of consumer credit.

[moggie12]

2. This bill can still be killed -- Schumer & Kennedy may pull out the stops

Please send e-mails to your Senators, even is they're Repubs. Easy link to zap off e-mails:

http://ga3.org/campaign/senateindebt

The Consumers Union article you posted said it well:

"At a time when the economy has been weakened by terrorist attacks, the recession and corporate wrongdoing, ordinary Americans are increasingly finding themselves in precarious financial positions. When personal disaster strikes, usually in the form of a divorce, loss of a job, or high medical bills, bankruptcy is often the only relief for struggling families. But provisions in the bill, such as the means test, would deprive these families of this final safety net. For example, the means test would set up an inflexible formula to determine if an individual debtor is eligible to declare chapter 7 bankruptcy. In addition, the bill would endanger the welfare of children by diverting money that could be used for child support payments to other creditors."

This bill is a travesty!

[katinmn]

4. I can't believe it. I just heard Coleman (R-MN) is against the bill

in its present form. (Heard on Air America 950 in Minneapolis)

Since Coleman has voted for * initiatives 100 percent of the time I can only guess that he has heard from a lot of pissed off voters and that others in Washington must be hearing from a lot of people, too..

There's hope, guys.

Keep writing and calling.:thumbsup:

[rumpel]

7. Exactly. Child Support and taxes were not dischargeable. If someone is not

able to pay child support, he or she can go to the issuing court and ask for a modification at anytime. When was this law changed?
Therefore, Session's floor comments the other day promted me to write Senator Boxer. It is a deception for him to say "this bill is to protect single mothers and their children".
My ex tried it on me, but the only protection I had was that child support was not dischargeable. He never showed up at his own bankruptcy hearings continued 3 times. If child support was dischargeable the then pending dissolution trial would have been taken off calendar permanently rather than just being stalled for a year.

[madmark]

3. The following lettert has been sent to Kennedy asking for a filibuster

I work in the area so my comments may be more substantive than others can make. Feel free to forward the letter (or portions, or just points, from it) to your congress people. People reading the thread should ask their reps to kill the bill as it is awful:

Dear Senator Kennedy,

I apologize for being a non-constituent taking up your time but I wanted to be heard on the bankruptcy bill. I am concerned that my two republican senators maybe unresponsive and its my understanding that you have taken the lead opposing what is in my view awful legislation.

I work as a bankruptcy practitioner and below is a letter I sent my senators setting forth some of my substantive concerns about the bill. I am attaching it for any use you feel fit. The bill is bad enough, and its effects will be so sweeping, immediate, and dire for the middle class, that I believe this bill may merit a filibuster and I do not think I am overstating the matter. Please consider using this device to challenge the bill or at least to put some sunlight on it (the media has done almost nothing as to its negative consequences). Thank you for your consideration of this matter. The letter with the substantive points is as follows:

Dear Senator McCain,

I am one of your constituents and have practiced bankruptcy law for the past 12 years here in Phoenix. Before you vote to pass the bankruptcy bill could you please do two things: 1)Read this bill, and 2) Speak to at least one of Arizona's bankruptcy judges (preferably a republican one so that they have more credibility in your eyes) about the bill's merits. If you can still vote for the bill after you have read it and spoken to one of our judges then you have at least done the bare mininum diligence that this decision requires. I suspect though if you actually read the bill and speak to one of our judges about it (not necessarily in that order) you will be unable to vote for it because it is in effect an economic attack on the middle class and will render the bankruptcy courts dysfunctional. I know that may sound like hyperbole but I honestly do not think I am overstating the matter.

In my practice approximately 5% of the bankruptcy cases I see could be characterized as abusive or involving lack of personal responsibility. The balance are caused by the following in descending order: divorce, illness, injury, job layoffs, and entrepreneurial failure. Even Republican Senators during this debate have already described the bill as being "harsh" when applying it to members of the military. Just as the Senate does not think this harsh bill should apply to the military why would they want it to apply to the divorced, ill, injured, layed off and the entrepreneurs who fuel our economy, take the risks that have to be taken for growth to ever occur, and failed in this noble attempt.

I will preview two important provisions in the Bil. The Bill "means tests" the ability of people to file Chapter 7 liquidations and forces everyone except the lower middle class with one income (2 incomes will be too much), the impoverished, and the extremely wealthy to file a Chapter 13 wage earner plan bankruptcy instead of a Chapter 7 liquidation. The Bill also requires that debtor's lawyers assume liability for the accuracy of the Debtors' representations of their financial condition set forth in their bankruptcy schedules and statement of financial affairs. Chapter 13's administrative transaction costs are three to four times greater than Chapter 7's. Chapter 13's will require a monthly payment stream for 3 to 5 years whether or not there really is any disposable income from which this payment can be made. Chapter 13's do not provide a debt discharge until the conclusion of the 3 to 5 years and credit markets refuse access to these debtors prior to receipt of the discharge. In Chapter 7's the discharge order comes in approximately 4 to 5 months and credit markets (ie. car lenders) will deal with debtors (albeit at a higher rate) after the receipt of the discharge. Chapter 13's plan currently have a high failure rate (ie. most debtors default on their Chapter 13 plan payments and never get their discharge). No lawyers will represent Debtors with the new liability provisions. Without lawyers the already high Chapter 13 failure rate will skyrocket. The net effect is hundreds of thousands/millions of American middle class people (the divorced, ill, injured, layed off, and failed entrepreneurs) will no longer get discharges and no longer be able to function as productive members of the American economy. All this at time when we are likely looking at a coming housing bubble correction, interest rate spike (accelarated by government budget and trade deficts), and dollar sell off.

And for what? I understand that MBNA and other credit card issuers have contributed a great deal to Senators for the additional leverage on Debtors that this bill will give them but is that enough to vote for a bill that is harmful to the interests of the American economy and its middle class.

There are other bad things in the bill and if your office would to discuss them further feel free to correspond to arrange the same. Thank you for your time considering this matter.

[katinmn]

5. great letter!!!

[rumpel]

6. In the same NY Times editorial it has a link to millionaire loopholes

How much more shameless can these repugs get.

http://www.nytimes.com/2005/03/02/business/02bankrupt.html

:mad:

[hiley]

8. Kick all these actions

:bounce:

Another action alert at http://www.civilrights.org/

Don't punish the victims of bankruptcy

The Senate could vote as soon as next week on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256). I urge you to oppose this cold-hearted bill because it would punish the victims of financial catastrophe including many of the most vulnerable Americans while helping the credit card industry saddle working Americans with more debt through abusive interest rates and payment plans.

S. 256 punishes the victims of financial catastrophe. The vast majority of Americans who file for bankruptcy each year are working families who are not abusing the system. Instead, they have experienced financial catastrophe, usually resulting from job loss or medical emergency. If enacted, S. 256 would punish these victims of financial disaster by limiting their ability to obtain bankruptcy protection and making it even harder to start over after losing jobs or facing a medical emergency.

Direct link to action at

https://secure2.convio.net/lccr/site/Advocacy?pagename=homepage&page=UserAction&id=251&JServSessionIdr001=rm5lkua881.app13b

:kick:

[trogdor]

9. Then punish Delaware.

Pay off the damn cards, chop 'em up, then send the shreds to Sen. Biden's office.