NEWS: Quick! Go Bankrupt!

s5 said:
putting aside who will win and who will lose from this new law, it's disheartening to realize that after a 3 page thread discussing highly technical aspects of collections and bankruptcy, there is no clear picture of what you can expect. and i'm sure that's by design.

comicking said:

I was still talking about credit cards at that time. If the code says otherwise, give up what title, section, subsection, etc. or shut up. If you're talking about whatever the hell it is you were talking about that was off subject. You can keep that knowledge to yourself as I wasn't interested in that to begin with.

At least I've given where I'm coming from. You didn't. You're still not giving up any information. Are you a Case Law Attorney, Bankruptcy Attorney, General Practice? Bartender?

edited to add: If all you're looking for in this is to have the last word, then simply reply "last word" and you can have it. If you're going to continue trying to make this into something its not, I'll continue too.

[Edited on Aug 22, 2005 by comicking]

reprobate said:

Ummm, I'm poking you for sport because you're arrogant and not remotely as bright or clever as you think. I've made my points, which address rather succinctly why "pay what you owe" is a childish and comic book understanding of the equities involved. Neither you nor anyone else has said anything whatsoever in rebuttal, or for that matter anything of much substance. You're so busy trying to impress everyone with what you know you've completely abdicated participation in discussing what is actually at issue.

About the Bankruptcy Bill

Compiled from Associated Press and NPR staff reports:

Supporters in Congress and the financial services industry say the changes in the Bankruptcy Abuse Prevention and Consumer Protection Act will end the practice of people abusing the bankruptcy system. They say bankruptcy is often the last resort for gamblers, fathers avoiding child support, and multimillionaires seeking to shelter assets from creditors.

But opponents said the bill will hurt those who can least afford it -- low-income working people, single mothers, minorities and the elderly -- and would remove a safety net for those who have lost their jobs or face crushing medical bills.

Means Testing:

Taking effect six months from enactment, the measure will set up an income-based test for measuring a debtor's ability to repay debts. Those with insufficient assets or income can still file a Chapter 7 bankruptcy, which, if approved by a judge, erases debts entirely after certain assets are forfeited.

Those with income above the state's median income who can pay at least $6,000 over five years -- $100 a month -- will be forced into Chapter 13, where a judge will then order a repayment plan.

The U.S. average for median household income was $42,654 a year for 2001-2002. State median incomes range from $29,752 in West Virginia and $30,761 in Mississippi to $53,791 in Connecticut and $55,525 in Alaska.

Under current law, a bankruptcy judge determines under which chapter of the bankruptcy code a person falls -- whether they have to repay some or all of their debt.

Accommodations for the Military:

The bill allows for special accommodations for active-duty service members, low-income veterans and those with serious medical conditions in the new income test for bankruptcy applicants.

Asset Protection Trust

The new law leaves intact an increasingly popular loophole called asset protection trusts. These trusts allow people to protect substantial assets from creditors even after filing for bankruptcy.

Setting up these trusts can cost many thousands of dollars. Maintaining them and paying an in-state trustee can cost thousands more. That rules these trusts out for people of modest means, making them an option mainly for the wealthy.

Until 1977, these trusts could only be opened offshore. But since then, eight U.S. states -- Alaska, Delaware, Utah, Nevada, Rhode Island, Oklahoma, South Dakota and Missouri -- have passed laws exempting assets held in the United States from federal bankruptcy laws. People opening one of these trusts don't have to be a resident of the state, but merely establish the trust through a financial institution located there.

sixtenblue said:
...
Further, and quite interestingly:

This last is rather illuminating.

comicking said:...
Its those in Texas who have $5 million dollar houses with no mortgage who file on $100,000 in debt who are the ones that the courts are taking a closer look at.

bones_708 said:

Are you talking about him or you? Because it really seems to fit you better.

*pause for the obligatory spewing of reprobate bile*

reprobate said:

Oh please, don't you have another thread to contaminate with your usual "I don't know the first fucking thing about the complex issues here, but its my 'Merican right to have an opinion so I'm gonna beat this thread into the ground."

bones_708 said:

And...........unpause.

GramNegative said:

Rest easy comicking, your $5 million dollar house will survive the bankruptcy

comicking said:

My $5 million house in Texas is unprotected. My $5 million house in either Alaska, Delaware, Utah, Nevada, Rhode Island, Oklahoma, South Dakota or Missouri will survive. Thanks!

Until 1977, these trusts could only be opened offshore. But since then, eight U.S. states -- Alaska, Delaware, Utah, Nevada, Rhode Island, Oklahoma, South Dakota and Missouri -- have passed laws exempting assets held in the United States from federal bankruptcy laws. People opening one of these trusts don't have to be a resident of the state, but merely establish the trust through a financial institution located there.

Keith said:
But what did they do about predatory lending practices? Oh yeah, that's right, nothing.

Stiles said:

Wrong-o:

MisterSatan said:

Hey, the harder a law is to understand, the more you can expect it to bite you in the ass later on down the road.

skankzor said:

More money for the most important people in our society, the lawyers, who write, pass, and then profit off the laws.

comicking said:
I must be missing something still. I understand that I could have $5 million in a trust in one of those states that would survive the bankruptcy, regardless of where I live, but how does that keep the $5 million house in Texas protected? Texas is not one of those states listed and a house is physical property. My trust knowledge is limited, I am not aware that a trust can own property. An Estate can own property, but is a Trust the same thing?

skankzor said:

More money for the most important people in our society, the lawyers, who write, pass, and then profit off the laws.