New Bankruptcy Law takes effect Oct 1st.

[Dinner]

Originally posted by Imran Siddiqui


So what you are saying that even though our savings rate is abyssmal, we should just ignore it, because consumers are spending? Short term gain over long term catastrophe?

I'll take a short recession in order to improve our savings rate. Asia isn't going to bankroll us forever.

I'm saying there are ways to get the savings rate up which doesn't strip people of their right to start over. The reason we have bankruptcy laws to begin with is because of the horrible social effects debt peonage created. Republicans apparently want us to go back to those days though. If people have their lives screwed royally (normally due to factors not entirely under their control) then it is in societies interests to allow them a fresh start.

[KrazyHorse]

Originally posted by MosesPresley
The support for this law seems to be based on a moral stance about debt and a perception that "Most Americans act like its no big deal to declare bankrupcy" or that they are blowing their money on "new rims or a bass boat."

It's not a moral stance; it's a practical one.

The US is busy spending more money than it earns (as a nation). The rest of the world is busy financing this shopping spree by buying US assets and securities.

There is a day coming in the not-too-distant future when foreign creditors will refuse to buy any more US paper. The American dollar will plummet, consumer spending in the US will drop through the floor, the US economy will slam into a depression and drag the rest of the world into recession.

Self-preservation implies that I should support any move which will encourage the US to ween itself slowly but steadily off of credit-driven buying.

[KrazyHorse]

Originally posted by Oerdin


I'm saying there are ways to get the savings rate up which doesn't strip people of their right to start over.

The right to start over doesn't include the right to start over while keeping your house. That makes a mockery of the idea of bankruptcy.

[Dinner]

Originally posted by Patroklos
We disagree, lets leave it at that. This topic deserves its thread.

No, I don't think it should be left at that. You want out of the health care discusion because you know all the facts are not in your favor. We get horrible results dispite spending the most per person on health care in the world. Our system is fundimentally broken because we pay to much and large sections of our population get no coverage at all.

[Dinner]

Originally posted by KrazyHorse
The right to start over doesn't include the right to start over while keeping your house. That makes a mockery of the idea of bankruptcy.

That was designed to prevent people from being homeless. Remember that these people's credit is now trashed (they declared bankruptcy) and most rental owners demand a credit check. Many people will get tossed out and not be able to find another place or come up with the required 1st moth, last month, and one month deposit. When I was over seas I rented out my house and I demanded and got $4500 up front before I'd let anyone move in. That's just par for the course here in California.

Can someone who declared bankruptcy and who is now forced to lose all assets except their IRA (and even that can now be siezed if it is over a certain size) come up with $4500? If they lose the roof over their head and can't come up with thousands for a deposit then what happens to them?

[Dinner]

Originally posted by KrazyHorse


The right to start over doesn't include the right to start over while keeping your house. That makes a mockery of the idea of bankruptcy.

You didn't get to keep the house free and clear. The law just prevented the mortgage company from siezing the house and selling it from under you. They had to reschedule the debt as part of the larger bankruptcy restructuring.

It's not insane at all and was actually pretty fair to both parties.

[Ming]

Originally posted by KrazyHorse
And credit cards also charge an interest rate of 15+%

Only if you don't shop around. There are many FAR better credit card deals out there. But many people are just lazy and stupid and just fill in the forms they get in the mail. Anybody paying 15% or more is either a moron, or has had past credit problems.

[KrazyHorse]

...or just doesn't care because they have no plans to use their credit card as a line of credit anyway...

[DanS]

Previously people could easily file for chapter 7 bankruptcy which allowed them to start fresh and simply walk away from all their debts. Now it is much more difficult to qualify for chapter 7 and the majority of people will instead be forced to file chapter 13 bankruptcy which requires people to pay as much as possible.

This is a good change. A good law. The only wrinkle that I see is catastrophic health care.

[chequita guevara]

The vast majority of people who declare bankruptcy do so not because they are spendthrifts, but because of personal tragedy: divorce, illness, or job loss. Only a very tiny segment of those declaring bankrupcty are irresponsible and abusing the system.

Far from Americans being too willing to just declare bankruptcy, most Americans won't declare bankrucpty when they should, and fight for several years to try and do things the "right way" before finally being forced to give up. There is massive social opprobrium for going bankrupt. It is seen as a personal failure, you are less of a person for doing it, etc.

This law is just another way of screwing the poor and misfortunate. It is just more proof that the GOP sucks the cheney of Mammon.

[Imran Siddiqui]

But from what I understand, this law is going to ream people who lost their incomes due to serious health problems.

Then to solve the problem we should address our health care system rather than say we have a health care problem and using that to slam other things (bankrupcy, civil torts, etc).

I used to be against national health care, but I've switched after I learned how much waste is generated by our system (the overhead itself is ridiculous!). I now favor basic health care for all Americans (the major stuff done privately with public support for the poor). While it'll cost more in the short run (and you'll feel it in taxes), it'll solve the problems with this bankrupcy bill AND civil torts (government can handle losses due to doctor negligence much better than the small hospital).

[Theben]

Originally posted by Imran Siddiqui

So what you are saying that even though our savings rate is abyssmal, we should just ignore it, because consumers are spending? Short term gain over long term catastrophe?

So you are advocating govt interference into people's lives based on moral principles? And targeting long-term solutions instead of short-term fixes?

Are you sure you're a republican? I mean those are their mantras.

[Imran Siddiqui]

So you are advocating govt interference into people's lives based on moral principles?

Economic principles. Encouraging a higher savings rate is good economics, not anything to do with morality.

[Theben]

Originally posted by Imran Siddiqui

So you are advocating govt interference into people's lives based on moral principles?

Economic principles. Encouraging a higher savings rate is good economics, not anything to do with morality.

You agreed with KH earlier and his & your reasoning was basically "it's good for them."

Not that I disagree with you, but as always there's a better way than the Repug one. And I don't see any change in business bankruptcy laws...

[Patroklos]

And credit cards also charge an interest rate of 15+%

If it is good enough to run up on that new surround sound system, it is good enough to run up on health insurance.