Wednesday, March 09, 2005

Introducing the Bankruptcy Abuse Prevention and Consumer Protection Act Credit Card Company Welfare and Consumer Fleecing Act

FYI, Ohio is the 8th ranking state for personal bankruptcy filings. If you've got any serious credit card debt, you better get rid of it immediately and don't even think about filing for personal bankruptcy after this bill is signed. If you're thinking "Only irresponsible spend-thrifts file for bankruptcy," keep reading; time for you to get a clue.

First some background on the most common types of bankruptcy:
Chapter 7 Bankruptcy - The most common type of bankruptcy proceeding. It is a liquidation type of proceeding (as opposed to a reorganization proceeding). All of the debtor's assets, with the exception of "exempt" property, will be sold, and the proceeds will be used to pay their debts. If the proceeds are not enough to pay off all the debts, unpaid amounts on "dischargeable debts" will be discharged.


Chapter 13 Bankruptcy - Known as reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.


Chapter 11 Bankruptcy - Typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.


Guess which chapter is conspicuously absent from the Credit Card Company Welfare and Consumer Fleecing Act.... you guessed it: Chapter 11. Could this be because the bill was basically written by MBNA, the world's largest issuer of credit cards and top contributor to the Republicon (intentional misspelling) Party and its candidates?



Let's examine the title of this bill: Bankruptcy Abuse Prevention and Consumer Protection Act. Now this implies that bankruptcy abuse is occurring and that consumers need protection. Ok, I'm sure bankruptcy abuse occurs, but I'd be willing to bet that there is significantly more corporate bankruptcy abuse than personal bankruptcy abuse, especially since half of all personal bankruptcies are due to medical bills. I also agree that consumers do need protection from predatory lending practices; unfortunately it ain't gonna be in this bill. Orwell is surely rolling over in his grave; from pride or disgust, I'm not entirely sure.

In a nutshell this bill makes it more difficult to file for personal bankruptcy; in effect this is declaring war on the middle class because it reduces the ability of the laws designed to protect consumers from predatory lending practices on the part of credit card companies and strengthens the ability of those companies to collect from consumers all ready in a time of financial hardship.

Now you may be wondering, "If this bill is so horrendous, why didn't any Democrats try to stop it?" Well, they did; Senators Schumer (NY), Durbin (IL), Nelson (FL), Dayton (MN), Corzine (NJ), Kennedy (MA), Akaka (HI), Feingold (WI) all proposed amendments all of which were rejected by all Republicons that were present. The highlights include:

02-Mar
On the Amendment S.Amdt. 32
Corzine Amdt. No. 32; To preserve existing bankruptcy protections for individuals experiencing economic distress as caregivers to ill or disabled family members.
REJECTED

02-Mar
On the Amendment S.Amdt. 28
Kennedy Amdt. No. 28.; To exempt debtors whose financial problems were caused by serious medical problems from means testing.
REJECTED

02-Mar
On the Amendment S.Amdt. 29
Kennedy Amdt. No. 29; To provide protection for medical debt homeowners.
REJECTED

02-Mar
On the Amendment S.Amdt. 17
Feingold Amdt. No. 17.; To provide a homestead floor for the elderly.
REJECTED

03-Mar
On the Amendment S.Amdt. 49
Durbin Amdt. No. 49; To protect employees and retirees from corporate practices that deprive them of their earnings and retirement savings when a business files for bankruptcy.
REJECTED


So basically if you fall into debt because you're trying to pay for your or someone else's medical bills the Republicons don't give a shit if you lose your home or your retirement.
If you are old and fall into debt probably trying to pay for your outrageously over-priced prescription drugs, the Republicons don't give a shit if you lose your home. Guess they expect you to live with your children, if you have any and if they aren't in debt themselves.


03-Mar
On the Amendment S.Amdt. 49
Durbin Amdt. No. 49; To protect employees and retirees from corporate practices that deprive them of their earnings and retirement savings when a business files for bankruptcy.
REJECTED


Pretty self explanatory; they want all your money and don't give a shit if you're living on the streets or with your debtor adult children.

03-Mar
On the Amendment S.Amdt. 38
Durbin Amdt. No. 38; To discourage predatory lending practices.
REJECTED


Told you there wouldn't be any protection from predatory lending in this bill.

03-Mar
On the Amendment S.Amdt. 37
Nelson (FL) Amdt. No. 37; To exempt debtors from means testing if their financial problems were caused by identity theft.
REJECTED

03-Mar
On the Amendment S.Amdt. 31
Dayton Amdt. No. 31.; To limit the amount of interest that can be charged on any extension of credit to 30 percent.
REJECTED

The Republicons are basically saying, "Fuck you America; the banking and credit card companies paid for my campaign. Time to return the favor."



03-Mar
On the Amendment S.Amdt. 42
Schumer Amdt. No. 42; To limit the exemption for asset protection trusts.
REJECTED


Remember Enron CEO Ken Lay and how he got to keep his multimillion dollar home in Florida? Well, he got to keep his multimillion dollar house because a few states, such as Nevada and Florida, allow you to place some of your assets in a "protected trust" which classifies those assets as untouchable by bankruptcy laws even if you aren't a resident of the state with those laws on the books; note that Ohio does not have this protection. Now many of you can afford more than one home in a different state no less? If you can, please make a donation to The Ticked Off Ohioan Foundation ;oP Seriously though, if you think that you average Joe can take advantage of this, stop drinking the kool-aide -- it's bad for your health and your wallet. This bill specifically provides exemptions for assets in protected trusts. Schumer tried to close this loophole. This is nothing more than a bribe to keep the top 1%, those earning $600k+ per year, voting from Republicons.


Every single Republicon present voted against all of these amendments. This entire bill is nothing more than a reward to the credit card companies for financing the Republicon Party and its candidates. One result of this bill will be an increase in need for government assistance such as welfare and Medicare/Medicaid; too bad state governments are gutting those programs, since the federal government is cutting the amount of money it sends to state governments because the money isn't there due to the federal deficit which are a result of an unnecessary war (Iraq not Afganistan) and those completely unnecessary tax cuts to the top 2% wage earners, those earning $200k+. COMPASSIONATE CONSERVATIVE MY ASS!!!

-The Ticked Off Ohioan

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