Bankruptcy, outrage, congress allows 30% interest rate

...the Republican-controlled Senate refusing to limit consumer interest rates to 30%...

...many cardholders — especially low-income users — have ended up on a financial treadmill, required to make ever-larger monthly payments...

...changes proposed in the Senate bill would fundamentally alter long-standing American legal policy on debt. Under bankruptcy laws as they have existed for more than a century, creditors can seize almost all of a bankrupt debtor's assets, but they cannot lay claim to future earnings.

The proposed law, by preventing many debtors from seeking bankruptcy protection, would compel financially insolvent borrowers to continue trying to pay off the old debts almost indefinitely.

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http://www.latimes.com/news/nationworld/nation/la-na-bankruptcy4mar04,0,7113947.story

and it's not US.

I have one more reason to cut up my credit cards. I'll give up extras in life just to get rid of credit cards. If I don't have the money I go without. If I eat beans for the next several months, that's fine, no way am I giving money for the pukes to live the easy life.

I dont understand it! When an individual goes bankrupt...what does that mean? Are their debts wiped out?

I filed Chapter 7 in Texas 2 months ago. I got to keep my house (and house payments) my car up to 6 hundred dollars cash and 3 thousand dollars of personal goods. My credit card debt disappeared.

Chapter 13 orders a payment plan. Talk to your local attorney quickly if you want to get the current deal.

i just did not understand it! Do you know what chapter 11 is about..in bankruptcy?

It is a reorganization of Debts. Under the Bankruptcy Code a Corporation can NOT get a discharge of debt, it can only have that debt reorganized. Often what happens is a Company enters Chapter 11, it than sells its assets to a new corporations which has as its stockholders the old corporation's creditors. This happened to almost all of the Asbestos Companies, the Asbestos's main Creditors where the people who sued them and won judgments for the affects of asbestos. These became the Companies Stockholders (The older stockholders received nothing).

Now the above is NOT the normal Chapter 11, most times all that is needed by the Corporation is its debts reduced to a manageable level. K-mart for example filed Chapter 11 just to get a handle on its debt to its suppliers. Once the Cash flow problem was solved K-mart paid off its Creditors and emerged out of Chapter 11.

Another way Chapter 11 is used is to dissolve a Corporation that is no longer viable. For example Schwinn Bicycle Company was the biggest US Bicycle Company for Decades. In the early 1990s it Filed Chapter 11, after some months in Chapter 11 the Bankruptcy Judge determined that there was no way for Schwinn to pay off its debts, the Judge ordered the Corporation assets sold (Including the Name). Thus Schwinn Bicycle Company is no more (Even through you can still buy bikes with the name "Schwinn" on it, but these are produced by the company that purchase the Name "Schwinn" it has nothing to do with the old Schwinn bicycle Company.)

The purpose of Chapter 11 is to provide a mechanism for viable companies to stay in business and to dissolve non-viable companies when such companies run into economic problems. Such problems happens to many still viable companies and Chapter 11 exists to help them stay in business while also protecting their Creditors.

now you will live in poverty for up to five years while the court takes every extra dime to give to your creditors

Secured debt cannot be wiped out (unless the judge orders it so
but the law is pretty much secured cannot be discharged...why it's
called "secured").

Bear in mind to declare Ch. 7 in most states you have to be
living in a box, creditors will take everything and except
just a few states, like Florida and S. Dakota, they will take the house for sure.

Unless you're driving a seriously smoking beater car, they'll take that too and any money you have and potentially garnish your wages.
Family heirlooms and so forth...pretty much everything is given to the creditors.

Broke, means flat busted, eating cat food broke.

So, it's already set up as a desperate last resort.

Secured debt is stuff like child support, IRS back taxes, alimony,
payments that are a result from a law suit against you and so forth.

What has happened is credit card companies are managing to change their
debt from unsecured debt (which you could get discharged in a ch. 7 bankruptcy) to secured.

Ch. 11 personal bankruptcy is a way to consolidate debt, pay a percentage and pay over time w/o having to lose your house and what not. But, odds are you will still have to pay back debt it's just a way to consolidate, reduce interest and so on.

So, what we have are "Mafia style" corporate loan sharks who are now
saying you cannot get out of their loan sharking practises no matter what. 5% of bankruptcies are due to credit card debt. A huge
percentage (> 50%) are women. 50% of all bankruptcies are due to medical bills.

Basically instead of the Mafia, we now have corporations.

I really did not understand how it all worked...and wanted just a clear and simple explaination...which u have given me..thanks!

Under The Common law if you owe debts to someone, that Creditor had the right to file a lawsuit against you and once a Judgment is entered against you to have the Sheriff sell all of your property to pay off that debt.

A problem arose when a debtor had more than one creditor. One of his Creditors could have the Sheriff sell the Debtor's property for whatever value the Sheriff could get, even if the property was worth way more than what the Sheriff sold it for. Thus one Creditor would get all of his debt paid, but the rest of the Debtor's Creditors would get nothing. In fact it encouraged Creditors to have Sheriff's Sale As soon as possible to maximize what that creditor could get.

This was a problem, Creditor A could get all of his money back, but Creditor B, and C would get nothing, even if the property of the Debtor was enough to pay off A B and C provided the Property was sold in a normal manner instead if in a Sheriff sale.

To solve this problem, Bankruptcy was invented during the Reign of Queen Elizabeth. Bankruptcy was when all of the Creditors of a Debtors went to court together to sell the property of the Debtor and thus maximize what each Creditor received. Soon after Bankruptcy was invented it was discovered you needed the support of one person to make bankruptcy work and that was the Debtor. Without his co-operation Bankruptcy would fail, for the Debtor has every incentive to hide his asserts from his Creditor. To solve this problem it was make the law that if the Debtor co-operated with the Bankruptcy, the debtor would get a discharge of all debts (The co-operation was a listing of all of his assets).

Now bankruptcy was disliked by the Commercial establishments of England and America but was viewed as needed. During the Constitutional Convention (1787) it was decided that to leave the States control Bankruptcy was to "Dangerous" to business so Bankruptcy was reserved as a Federal Function. From 1787 till 1896 You had various bankruptcy laws passed by Congress and than repealed a few years later do to complaints of Creditors but finally in 1896 Congress passed a Bankruptcy Act that lasted till 1976 (When it was replaced by the Existing Bankruptcy Code).

Now, bankruptcy is still called a "Creditor's Remedy" for collecting a debt from a person, but given the discharge of Debt feature Debtors have used bankruptcy more than Creditors have since 1896. Under the 1896 Act a debtor could keep what his state exempted from Sheriff Sale for the same debts (These today are known as "State exemptions"). Thus many people would file Bankruptcy to keep somethings and discharge the rest of their debts. These "State Exemptions" vary from State to State, for Example my home state of Pennsylvania only Exempts $300 of Goods from Sheriff Sale. Other states (like Texas and Florida) exempt people's homes from Sheriff sale for debts (Provided the Mortgage is paid on the House if the house is subject to a mortgage).

One of the Improvements in the Bankruptcy Code over the 1896 Act was the introduction of what is called the "Federal Exemptions" under the Code. Prior to 1976 the only exemptions permitted was the state Exemptions and these varied from state to State, Under the Code a debtor could opt for these "Federal exemptions" and keep those goods listed a exempt even in states that did not permit such exemptions under State Law.

Under the Bankruptcy Code today you can take either the Federal or State Exemptions. In My home state almost everyone takes the Federal Exemptions for the State Exemptions are so low (i.e. Only $300 in Goods). In States like Texas and Florida people take the State Exemption for the State Exempts homes from being sold for debts (Other than for mortgages on those homes).

Now these exemptions only apply to a person's personal liability for the debt, not for any claim against a piece of property. For example when someone buys a home he generally signs a mortgage. That Mortgage is both a claim on the Debtor personally (and this personal debt can be discharged in bankruptcy) AND a claim against the house (And this later is NOT discharged in Bankruptcy).

Thus when you hear what congress wants to do it is regarding these "Personal Debts" not "Secured Debt".

Under the existing Bankruptcy law you can keep the following property provided any debt secured by the property is kept on (These are the "Federal exemptions"):
1. $19,000 equity in your home (Equity is defined as the difference between the house value and the mortgage claim to the house).
2. $2000 equity in a Automobile
3. $10,000 "Wild Card" exemption to Cover households goods, pets, and other items of personal property.
4. Retirement plans.

Now some debts are NOT dischargable in bankrupt for example, any debt related to Driving while under the Influence of Alcohol or Drugs, any debt related to Criminal activities, Student Loans, Taxes, municipal liens etc.

Under the bankruptcy Code a private individual has the option of filing under either Chapter 13 or chapter 7 of the Bankruptcy Code. Chapter 7 is the traditional discharge i.e. the Debtor files the Chapter 7, tells the Court of his debts and assets and after a few months gets a discharge of all debts (and any assets above the above exemptions is turned over to the Creditors).

Chapter 13 is a little different. In a Chapter 13 the Debtor has to come up with a plan to pay off his Creditors. That plan is submitted to the Court and if approved implemented by the Bankruptcy trustee. Part of the plan is the Debtor turns over his income to the Trustee who pays his debts (The Debtor is given a set amount to live on as per the plan the Debtor submitted). Under Chapter 13 ALL Creditors must be paid under the plan, but the debt of each can be modified to reflect the actual income of the debtor.

In real life the only time Chapter 13 is used is if the Debtor fell behind on his Mortgage and needs a Plan to get caught back up. Under Chapter 13 the Debtor's plan can include his continued payment on the mortgage on his house AND on any arrears till the arrears on the Mortgage is paid up to date (Which must be within 3 years, or 5 years with permission of the Court). Generally once the payment arrangement is agreed to by the Mortgage company the Chapter 13 is converted to a chapter 7. All other debts are discharged in the Chapter 7, and the Mortgage plan is continued and the debtor keeps his house as long as he makes his mortgage payments AND the Arrears payment.

What Congress wants to do is force more people into Chapter 13 by forbidding them from filing Chapter 7. As you can see under Chapter 13 a person's income is turned over to a third party who uses it to pay the debt of the Debtor.

The Democrats have attacked this alleged "Reform" by the tactics of making it clear that blocking Abortion Clinics is a non-dischargable Debt. Democrats have even proposed ending the option of State exemptions (Mostly aimed at State like Florida and Texas where a person can owe a million dollar home and keep it in bankruptcy). The GOP opposed the later reform for it is generally GOP controlled states that have generous homestead exemptions but almost no personal property exemptions (You can keep you Home, if you own your home but if you are renting you can not even keep your Furniture).

People have come to rely on bankruptcy to discharge excess debts and keep something to re-start life with. The decline in Income over the last couple of Decades have made this more and more the case and thus the fight over Bankruptcy "reform".

instead of their constituents. Fucking rat bastards. :grr:

there is a revised GOP version with those parts snipped out?

Each state will need to step in with interest rate caps to stop this.

to keep voters so they can destroy the US and enable corporations
to take over America, absolute.

Those people are so stupid. They vote for "anti-abortion" "anti-gay"
and basically are voting to have their own throats slit by these bastards.

That's what a concrete brain who thinks in absolutes gets ya IMHO.

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getting your outstanding invoices from corporations is a joke.

What the hell are you doing billing in such large increments and no
downpayment anyway?

I imagine that you wanted the access to customers that wouldn't have used your business otherwise.

Almost losing your business is probably a combination of both the bad debt and your decisions to take on too much exposure to that risk.

No doubt you've learned a lesson.

under this bill.

The whole "credit score" thing is bullshit. They even now are using it to give car insurance quotes.

I don't believe there is any "correlation" to anything...I think it's more "intimidation" of the "we'll hurt your credit score" economic
bullying than anything.

Someone from the grassroots
movement needs to write a commando book on how to get around this crap
to qualify for a house and build up credit w/o going to the loan sharks
(credit card companies).

They have it set up so you cannot rent a car w/o a credit card, buy
an airline ticket (often won't take debit) and so forth...

How about Europe offering Americans credit cards by their rules?

We know they ain't charging 500% interest....just wipe out Citigroup
and the lot of them through not being customers.

They have everybody in America on their chain and jerk it constantly.

Full details here

Excerpts:

Sweatshops Expanded, Overtime Attacked, and State Minimum Wage Laws Undermined

This is as low as it goes, as the GOP fights to expand sub-minimum wage sweatshops across the country. Pennsylvania's Rick Santorum is leading the charge for a GOP bill that would ostensibly raise the minimum wage by $1.10 per hour, but in reality would cut wages for millions of American workers and expand unregulated sweatshops across the country.

As this Economic Policy Institute analysis details, the bill is a trojan horse for assaulting workers rights.

Licensing Sweatshops: While a $1.10 per hour minimum wage increase by itself would help 1.8 million workers, Santorum includes a poison bill exempting any business with revenues of $1 million or less from regulation -- raising the exemption from the current $500,000 level.

The upshot: while 1.2 million workers could qualify for a minimum wage increase, another 6.8 million workers, who work in companies with revenues between $500,000 and $1,000,000 per year, would lose their current minimum wage protection.

-- snip --

But here's a kicker from a GOP supposedly dedicated to states rights. Santorum's bill would ban states from requiring employers to pay tipped workers with a guaranteed wage. Employers could pay tipped workers nothing and force them to live off tips, while states would be preempted from creating a higher wage standard for tipped workers. . . Essentially, those workers could be hired for zero dollars and told they had to live only off tips, however little those were.

The attack on the tip credit is bad enough, but the precedent of the federal government creating a MAXIMUM standard for wage regulation and restricting the right of states to create a higher standard is even more dangerous.

Unbelievable the games these bastards play to sneak in votes that
make it look like they are doing something for people or make
it look like someone voted against the people when they did not.