Congress Ponders Change In Bankruptcy Law

[Joanne98]

Congress Ponders Change In Bankruptcy Law

While searching around for bankruptcy numbers (Bankruptcy numbers jumped 40% in 2007), I stumbled across this interesting article from January 2008: As bankruptcies surge, Congress ponders change in law.

In 2005, Congress passed a new law aimed at making it harder for people to file for bankruptcy and walk away from their debts.

With the tougher requirements, the number of bankruptcies declined in 2006 but surged by nearly 40 percent in 2007, according to statistics released Thursday. And experts predict the numbers will go higher this year.

The issue is gaining plenty of attention on Capitol Hill, where leading Democrats are proposing to roll back the landmark bankruptcy law. As the number of foreclosures rise, backers of an overhaul say it's needed to prevent more Americans from losing their homes.

"You ought to never lose your home in a bankruptcy proceeding," Connecticut Democratic Sen. Chris Dodd said during a presidential debate in Iowa last month.

While Dodd's White House hopes ended after the Iowa caucuses on Thursday night, his voice still carries plenty of clout on Capitol Hill. As chairman of the Senate Banking Committee, he has ignited a feud with the financial services industry by proposing to give bankruptcy judges more leeway in how they treat home mortgages. And Dodd has lined up support from more than a dozen senators for a bill that would tighten predatory lending practices, which are blamed for driving thousands into foreclosure.

Business groups have no interest in reopening the 2005 bankruptcy bill, one of the first major achievements of Bush's second term, which passed when Republicans controlled Congress. But Dodd calls it "one of the worst pieces of legislation ever passed."

More than 801,000 personal bankruptcy filings were made last year, compared with more than 573,000 in 2006, according to statistics collected by the National Bankruptcy Research Center and released by the American Bankruptcy Institute (ABI) on Thursday.
Lots of questionable lending decisions by banks and credit card companies were made with the passage of the Debt Slave Act of 2005, more commonly known as the Bankruptcy Reform Act of 2005. Nothing much will happen this year, but 2009 will likely be another story.
http://globaleconomicanalysis.blogspot.com/

[jody]

1. "roll back the landmark bankruptcy law" and let Bush veto it in an election year. n/t

[HelenWheels]

2. It never should have been enacted in the first place

I was so disgusted that one of my Senators voted for it, but Kohl aways votes for the rich guys pocket.

Glad to see them addressing it though - even though my sister already lost her house. (don't feel to bad for her though she votes repuke)

[Faygo Kid]

3. That 2005 law was ugly and disgraceful - passed with Dem support

18 Senate Dems voted for it. For shame. Obama voted No, Clinton was the only senator not voting (Bill's heart surgery, so I give her a pass this time).

Wish her vote had been on the record, though. The Dems who voted for it had damn well better fight to change it. Look at the tragic post earlier about the jobless guy who committed suicide because of medical bills, the leading cause of consumer bankruptcy.

[populistdriven]

9. Sen. Nelson D-FL is the Corporocrat ideal nt

[williesgirl]

4. We need to pressure them to do this. rec'd

[heidler1]

5. The bill would probably die in the Senate, but it would make the Republicans look

very pro business which would be good if pushed in October.

[whistle]

6. With 15 months under present conditions we can expect 20 to 40 million homers

...and all chartered banks to go into foreclosure and be out in the streets. Senator Dodd is right on target, but something needs to happen at the Federal level withing 30 days, not wait until 2009. Immediately pass the Homeowners and Bank Foreclosure Protection Act with realistic time frames such as 5 to 10 years for all parties to work things out. The hedge fund gamblers and real estate speculators which BushCo has been bailing out since last summer should have no more money thrown at them and maybe even cancel their debt claims completely.

[Joanne98]

8. We need an email campaign.

[justgamma]

7. Senator Grassley pushed this through.

His website used to have the "government report" that he relied on to push this through. In the report, it said that only 20% of bankruptcies had medical bills listed in them and that medical bills were not listed as the main cause in most of those 20%.

I wish I could find that report, but you just know that this administration fudged the facts on this.