*Here comes OCTOBER 17th, get ready folks, nazi-style bankruptcy laws are closer then you think!... yet how fitting considering that this country with its' treasonous government/Federal Reserve is probably equivocally bankrupt 5,000 times over... SIGH!...
New bankruptcy laws could boomerang Posted on : Mon, 03 Oct 2005 07:02:00 GMT | Author : Philip Green News Category : Finance
WASHINGTON - The new bankruptcy laws that are designed to provide a Hobson's choice to people who owe money on their credit cards or loans could turn out to be a boomerang for lawmakers. The American Bankers Association revealed that more people defaulted on their card payments in the second quarter of the year. And this trend is expected to continue as the energy bills have broken all barriers in the aftermath of Hurricane Katrina.
"The last two quarters have not been pretty. Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations," said James Chessen, chief economist at the bankers association. He added that a record 4.81 percent of credit card accounts were defaulted in the second quarter. This figure has risen from the 4.76 percent in the previous quarter. He does not see any chances for improvement as "People love credit cards, and they love to go shopping. That's the heart of the issue."
In such a backdrop, the new federal law on bankruptcy, which makes it tougher for people to walk away from their creditors or get protection from them, is scheduled to come into effect on October 17. Under the new law, debtors who file fro bankruptcy would have to make payments by filing for Chapter 13, which means that they would have to pay under the stern eye of the court rather than take protection under the old Chapter 7. "A lot of folks just don't have the income to handle repayment plans, or they'll start out under a plan and a few years down the road, they'll get into some trouble and not be able to complete it as envisioned," said Bert Ely of Alexandria, a banking consultant.
But Steve Bartlett, president and chief executive of the Financial Services Roundtable in Washington disagreed. He said that the new law was designated to protect both the borrower and the lender, "The impact for the American consumer and our companies is that over the course of time, you establish a cultural shift ... in which you re-establish this sense in society that if you can pay your bills, you have to. There is no free pass," he observed. Travis Plunkett, legislative director for the Consumer Federation of America does not see it this way.
He said that once consumers are struck in a quagmire they would find it extremely difficult to get out of it. "We're going to see people in a debtor's prison without walls," said Plunkett. "They'll essentially slip through the safety net, hit the ground and then sink into an underground economy."
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