Note: There is a maximum of 200 words per comment. If you wish to post more, please visit our forum.
Bush to sign rewrite of the bankruptcy code
By Nedra Pickler, Associated Press Writer
Wednesday, April 20, 2005 | 2 comment(s)
WASHINGTON - Americans weighed down by credit card bills and other financial obligations will have a harder time wiping out their debt under a bankruptcy bill President Bush is poised to sign.
Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law, which will go into effect six months after Bush signs it today. The legislation is the biggest rewrite of the bankruptcy code in a quarter-century and was pushed for eight years by banks and credit card companies.
The measure would require people with incomes above a certain level to pay some or all of their credit-card charges, medical bills and other obligations under a court-ordered bankruptcy plan.
Those who fought the bill's passage said the change will fall especially hard on 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.
The financial services industry argued that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.
The bill got final congressional approval last Thursday, and Bush said he was eager to sign it. "These commonsense reforms will make the system stronger and better so that more Americans - especially lower-income Americans - have greater access to credit," he said.
New personal bankruptcy filings edged down from 1,613,097 in the year ending June 30, 2003, to 1,599,986 in the year ending last June 30, breaking an upward trend of recent years.
Between 30,000 and 210,000 people - from 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy each year in exchange for forfeiting some assets - would be disqualified from doing so under the legislation, according to the American Bankruptcy Institute.
Those people have six months until the law takes effect to escape the tougher guidelines. Bankruptcy attorneys have said they anticipate a rush to the courthouse.
Under the current system, a federal bankruptcy judge determines whether individuals must repay some or all of their debt.
Under the new law, those with insufficient assets or income could still file a Chapter 7 bankruptcy, which, if approved by a judge, erases debts entirely after certain assets are forfeited. Those with income above their state's median income who can pay at least $6,000 over five years - $100 a month - would be forced into Chapter 13, where a judge would then order a repayment plan.
---
On the Net:
http://www.whitehouse.gov
Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law, which will go into effect six months after Bush signs it today. The legislation is the biggest rewrite of the bankruptcy code in a quarter-century and was pushed for eight years by banks and credit card companies.
The measure would require people with incomes above a certain level to pay some or all of their credit-card charges, medical bills and other obligations under a court-ordered bankruptcy plan.
Those who fought the bill's passage said the change will fall especially hard on 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.
The financial services industry argued that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.
The bill got final congressional approval last Thursday, and Bush said he was eager to sign it. "These commonsense reforms will make the system stronger and better so that more Americans - especially lower-income Americans - have greater access to credit," he said.
New personal bankruptcy filings edged down from 1,613,097 in the year ending June 30, 2003, to 1,599,986 in the year ending last June 30, breaking an upward trend of recent years.
Between 30,000 and 210,000 people - from 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy each year in exchange for forfeiting some assets - would be disqualified from doing so under the legislation, according to the American Bankruptcy Institute.
Those people have six months until the law takes effect to escape the tougher guidelines. Bankruptcy attorneys have said they anticipate a rush to the courthouse.
Under the current system, a federal bankruptcy judge determines whether individuals must repay some or all of their debt.
Under the new law, those with insufficient assets or income could still file a Chapter 7 bankruptcy, which, if approved by a judge, erases debts entirely after certain assets are forfeited. Those with income above their state's median income who can pay at least $6,000 over five years - $100 a month - would be forced into Chapter 13, where a judge would then order a repayment plan.
---
On the Net:
http://www.whitehouse.gov
The comments below are from users of theworldlink.com and do not necessarily represent the views of The World or Lee Enterprises. Participation Guidelines
Note: There is a maximum of 200 words per comment. If you wish to post more, please visit our forum.
Note: There is a maximum of 200 words per comment. If you wish to post more, please visit our forum.
Not already registered?
The World welcomes your comments about stories, and we encourage a robust dialogue on this site. All comments must meet reasonable standards of decency and civility.
Please follow these basic rules:
- No defamatory comments about individuals or businesses.
- No deliberately false information.
- No obscenity or racially offensive language.
- No harassment, verbal abuse, threats or personal attacks.
- No information that invades another person's privacy.
- No business solicitations or charitable solicitations.
Comments that violate these standards will not be posted. Users with repeated violations may be banned from future posting.Comments will be approved throughout the day during business hours. After hours and weekend comments may not appear until the following business day. It may take a couple of hours before comments are approved.
The World generally does not edit comments, but we reserve the right to edit any comment that does not meet our standards.
Close Guidelines