Bullwinkle-- two things come to mind with cc debt as deductable,, some (those that could afford it the least) borrowers would look at the interest bill as a means of a higher refund. It will also permit and encourage higher interest rates on cards which will elimiate the tax benny.
Everyone I know that did a re-fi did not add to debt. Nearly all reduced the amount of time on their current mortgage, example-- one with 27 years to pay added $40 per month to knock 12 years off. Others just dropped the rate to put more $$ in their pocket,which allows them to pay the principle down with the same payment if they wish. Since most were fighting to loan the bux, fees were low to non-existant.
Those that get into credit problems will do so no matter what. Add the fact that credit card lenders are not real pickey who they lend to or the probability of payback. Since they easily take the write down/off of defaulted bux they do not mind adjusting rates to those that actually pay in order to cover losses. Even bright & educated people can get caught up with the ease of credit,,,sad but true. Whatever happened to living within ones means? During periods such as this a higher default rate can be expected by those finding themselves unemployed for an extended peiod-- but bk is much too easy for all. It amounts to-- "ok, we still have college loans but everything else is gone-- lets begin down the same path again"! What have they learned? What is the downside? Why would they not do it again? Not just the 25 yo that was caught up in finally earning a decent buck and $10K in cc debt, but the business man with a working professional wife earning about $175K and declaring BK with $500K debt.
A writeoff of vehicle debt-- used to be-- many require a dependable vehicle to get to work or for use in their job,, A reasonable deduction,, remember the sales tax & fuel deductions? They ended a probably should remain dead,,,
The biggest economic assist mentioned would be the higher deduction for mkt losses. Such a deduction would make some feel OK with selling a loser. With luck some 'loser' companies would go *POOF* from that alone. Then some of that money would most likely be spent or put into stronger companies.
