What We Need Is EASIER BANKRUPTCY (income, banks, stimulus, pay)

[KevK]

Originally Posted by sanrene

Who forced the banks to lend to unqualified applicants? The democrats in congress, that's who.

No, their credit is not ruined, it used to be that was as a deterrent, but not anymore. The administration made it so a person can walk away, scott free.

If you file chapter 7 your credit is TRASH. Nobody will lend you a dime for at least 2 years and even up to 5 years you are looking at interest rates of 20+% to borrow. And it stays on your report for 10 years! That is a long time.

[KevK]

Originally Posted by slackjaw

You still haven't explained how a law put people in debt. The law applies to me too, why didn't it put me in debt?

Because you and me did not get a smoke and mirror mortgage and we have been well insured and/or fortunate that a medical incident has not put us in the poor house.

[LookinForMayberry]

What we need is personal responsibility.

[Donna-501]

Originally Posted by KevK

If you file chapter 7 your credit is TRASH. Nobody will lend you a dime for at least 2 years and even up to 5 years you are looking at interest rates of 20+% to borrow. And it stays on your report for 10 years! That is a long time.

[Donna-501]

Every single person that I know personally that filed bankruptcy did for medical costs that they couldn't afford. They didn't owe any one else a dime.

I use to read the bankruptcy's being filed and where I live they were 90% medical not over spending at Macy's.

[rbohm]

Originally Posted by KevK

Of all the things in this country that were done that I think will turn out to be a disaster, at the top of that list would be the so-called "Bankruptcy Reform Act". That law has indebted millions and millions of Americans and made the process of getting out from massive debt complicated and expensive. The average fee for a Chapter 7 is not about $4000. Before this law it was about $1200.
The number one reason that the economy has such a drag on it is due to the lack of consumer spending and the reason consumers are not spending is because of the massive debt they have- much of which was encouraged by the reckless policies of the banksters.
And now there is no escape hatch via Chapter 7 bankruptcy. The laws should be changed - at least temporarily- to allow the old Chapter 7 where people could seek total relief from debts. And the time for reporting it on credit reports should be halved from 10 to 5 years. Also home mortgages should be allowed to be modified as the judge sees fit.
This will allow millions of Americans to file and get out from under debts and start anew which will mean that they have more cash to spend in the stores to help the economy.
Just my idea.

bankruptcy should be tough to get, and get through. if you make things easy for people, they will take the easy way out and never learn anything. as for the cost of bankruptcy filings, they have gone up over the years, like everything else. as for the reckless bank policies, that was pushed by the government with the community reinvestment act signed into law by that evil republican jimmy carter, oh wait he was a democrat. the other part of the problem was the extremely low interest rates by the federal reserve. it should be about 6% for the prime rate, not .25%. as for modifying mortgage rates, i agree that there should be some negotiation on that with the judge overseeing said negotiations, but these people signed up for a mortgage they knew they couldnt afford so why penalize the lender?

Originally Posted by KevK

I would not say everything but most things. I agree that laws in some states- notably Florida that allow people to keep multi million dollar mansions and million dollar a year pension payments (that is why so many corporate criminals and people like OJ Simpson moved there)- should be eliminated. States should not have any say so on bankruptcy which is done in Federal courts.
People should be able to keep some basics such as a car older than 4 or 5 years, their clothes, work tools and equipment and their house if it is valued less than a certain amount (maybe around $120,000) and has less than $3000 in equity in it. Also they can keep basic furniture and ONE television that is not a flat screen or HDTV and is valued at less than $300.

actually according to bankruptcy laws, the family is allowed to keep $1500 worth of cars, any tools that they need for work, most of their furniture, and other household items, and if they can make a deal with the mortgage holder, they can keep the house. as for the clothes, they get to keep those.

Originally Posted by KevK

They made a mistake for which they will pay via bankruptcy with ruined credit for the next several years. But the banks that practically begged unqualified people to borrow also made a mistake and we were forced to bail them out. They got NO punishment for their mistakes.

no the government forced banks to make loans to unqualified people, but again, the people signed on the dotted line, and thus why should the banks be held accountable?

Originally Posted by mhouse2001

Never in a million years. You buy, you pay.

Now, having written that, I blame the greed of our banking institutions as a primary reason for the fact that people are in debt. Charging interest is pure greed and is wrong. Usury is mentioned in the Bible, is it not? It's wrong and yet our entire "wealth" (please note deliberate use of parentheses) is based on debt and interest. Anyone who says America is wealthy doesn't understand that everything around us is debt. Last I looked, debt isn't wealth.

yes usury is mentioned in the bible, but as i recall it doesnt mention specifics. charging interest is not wrong, charging excessive interest is. if banks and other lending institutions were not allowed to charge interest, the fees you pay the bank for using their institution would be huge. you would be paying for everything, when you put money in, take money out, just to hold your money in fact. if you have a bank card you wouid be charged monthly fees to have it, etc. interest is the biggest way nanks make money, and it keeps all other fees you pay either low or non existent.

I believe interest rates should not exceed 5% on anything (this is a middle ground position because I think we can't just make them all zero in one fell swoop). Lower income people should pay lower interest rates. This is something proven to work in poor countries. Right now, the poorest pay the highest interest rates and end up with nothing but debt, which, from the sounds of it, is pretty much becoming the majority of our population. If you lower the interest rates, more people would be able to pay off their debts and we wouldn't need to resort to easy bankruptcy discussions. Making it easy to go bankrupt seems like it would ultimately be inflationary and foolish. It serves to make money even more worthless.

the reason the poorest in this country pay the highest interest rates is because they are the highest risk for non repayment of loans. in the poor countries there is a different attitude towards lenders in society, and there is more personal responsibility.

Originally Posted by KevK

If you file chapter 7 your credit is TRASH. Nobody will lend you a dime for at least 2 years and even up to 5 years you are looking at interest rates of 20+% to borrow. And it stays on your report for 10 years! That is a long time.

not true, after a bankruptcy, there are people who will give credit, but it does come with strings attached, usually you pay higher interest rates, and you dont get the higher end items either.

Originally Posted by LookinForMayberry

What we need is personal responsibility.

exactly. if people were more personally responsible, and did not sign for loans they know they cannot repay, and would not load up on debt just because chase decides to give them a credit card, things would be a lot better.

[hawkeye2009]

Originally Posted by KevK

Of all the things in this country that were done that I think will turn out to be a disaster, at the top of that list would be the so-called "Bankruptcy Reform Act". That law has indebted millions and millions of Americans and made the process of getting out from massive debt complicated and expensive. The average fee for a Chapter 7 is not about $4000. Before this law it was about $1200.
The number one reason that the economy has such a drag on it is due to the lack of consumer spending and the reason consumers are not spending is because of the massive debt they have- much of which was encouraged by the reckless policies of the banksters.
And now there is no escape hatch via Chapter 7 bankruptcy. The laws should be changed - at least temporarily- to allow the old Chapter 7 where people could seek total relief from debts. And the time for reporting it on credit reports should be halved from 10 to 5 years. Also home mortgages should be allowed to be modified as the judge sees fit.
This will allow millions of Americans to file and get out from under debts and start anew which will mean that they have more cash to spend in the stores to help the economy.
Just my idea.

Brilliant. So what we "need" is to convince more people to spend and live beyond thier means, as they can just declare bankruptcy?

It is the liberal way- no responsibility and the "plan" for fiscal and social anarchy to erupt.

Are these people insane?

[sindey]

Not everyone who has to file for bankruptcy is irresponsible.
There have been massive jobs loses in this country.
I have never filed for relief of my debts, I have lost my home due to getting cancer, not being able to work and great lose of income.
I am paying my debts a little at a time.

The bottom line is S--- happens folks and its not always your fault, don't ever forget it can happen to anyone including yourself.
Getting a second chance is a good thing.

[Informed Info]

Originally Posted by sindey

Not everyone who has to file for bankruptcy is irresponsible.
There have been massive jobs loses in this country.
I have never filed for relief of my debts, I have lost my home due to getting cancer, not being able to work and great lose of income.
I am paying my debts a little at a time.

The bottom line is S--- happens folks and its not always your fault, don't ever forget it can happen to anyone including yourself.
Getting a second chance is a good thing.

And that should be a point taken into consideration when filing for bankruptcy.

Most people who I see file for bankruptcy have multiple lis pendens against them for defaulting on a mortgage or an HOA payment or tax sales against them dating back through most of their lending history and it's not a new thing for them. They don't usually have a good history and it's not usually an "out of the blue - what happened????" kind of a thing.

A 62 year old retired FF union guy I was dealing with was going through bankruptcy - had property tax sales, water/sewage tax sales against him FOR YEARS - even when he was gainfully employed he hadn't done anything to his house in approx. 10 years other than dump garbage (and clothing) out his back door...but when I met with him, b/c the trustee needed a little more info...he pulled up in a brand spanking new Cadillac (he had to travel up from the beach where he had just bought his 2 bedroom , one block from the beach condo). And not a "used" car...a brand new one being that it was the first year Cadillac put their mini SUV on the market - and he had filed MONTHS before (still had the temp sticker on the back window) .

To top it off? He had personalized plates the next time I met with him.

People who want to file for bankruptcy should have to prove that they deserve it and be forced to go through the avenues (which should be provided for them b/c 99% are clueless) about how to reduce their debt so they can save their home or work out a payment plan with their debtors.

[KevK]

Originally Posted by hawkeye2009

Brilliant. So what we "need" is to convince more people to spend and live beyond thier means, as they can just declare bankruptcy?

It is the liberal way- no responsibility and the "plan" for fiscal and social anarchy to erupt.

Are these people insane?

The idea here is to hit the "reset" on the economy. One of the biggest reasons that the recovery is tepid and that people cannot spend money is because so many of them are over their heads in debt.
This would effectively be a "TARP" for the working folks. We have a TARP for the banks that made these loans. If people can get out from under this massive debt, they will have more to spend in the general economy.