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     | Saturday, October 14, 2000 - 12:23 pm  This story is posted under the Fair Use clause of copyright law. Retransmission or other use for commercial gain is strictly prohibited. Do you Yahoo!? The associated press contributed to this story. Friday October 13 5:40 AM ET House Passes Bankruptcy Legislation By MARCY GORDON, AP Business Writer WASHINGTON (AP) - A presidential veto looms over legislation making it harder for people to erase credit card and other debts in bankruptcy court. The measure has cleared the House and is moving toward a vote in the Senate. On Thursday, the White House said President Clinton - who supports a bankruptcy law overhaul in principle - would veto the bipartisan measure approved by lawmakers on a voice vote after a fairly brief debate. With Congress racing to adjourn next week, it was doubtful lawmakers would have an opportunity to override his action. Across the Capitol in the Senate, a staunch opponent, Sen. Paul Wellstone, D-Minn., has threatened to block the measure. However, his power to obstruct legislation is limited, and Senate Democratic leaders, including Minority Leader Tom Daschle, D-S.D., have expressed support for putting it to a vote soon. That could occur next week. The measure has divided Democratic lawmakers. Its proponents in both parties, who have been pushing such legislation for three years, have received millions of dollars in campaign money from banks and credit card companies this election year. In House debate, supporters pointed to the rapid rise in bankruptcy filings in recent years - 1.4 million in 1998 - as evidence of rampant abuse of the bankruptcy court system. They maintained the abuses create a ``hidden tax'' of at least $400 a year on each American family in the form of higher interest rates passed on by consumer credit businesses and other charges. ``Clearly this nation's bankruptcy system is broken when it enables individuals to avoid paying their debts,'' Rep. Jim Moran, D-Va., said before the vote. ``Bankruptcy reform is not a Republican or a Democratic issue. It's a consumer issue.'' The bill would establish a complex mathematical formula for determining whether debtors are able to repay part of their debts under a court-supervised plan and therefore would not be allowed to have them dissolved. But opponents said the legislation would hurt families hit by job loss, catastrophic medical expenses and other hardships that push them over the edge financially, as well as single mothers and their children seeking alimony and support payments from bankrupt fathers. ``This is a mean-spirited bill,'' declared Michigan Rep. John Conyers, the House Judiciary Committee's senior Democrat. AFL-CIO President John Sweeney later called it ``a heartless attack on working families by powerful financial institutions.'' In mid-1999 and early this year, the House and Senate passed differing versions of the legislation with veto-proof margins. Clinton threatened twice in June to veto the bill as written because he considered it unfair to ordinary debtors. His national economic adviser, Gene Sperling, said late last month that Clinton still found it unacceptable despite recent changes. If the bankruptcy measure again wins a veto-proof majority in the Senate, Clinton could choose to wait until Congress adjourns before effectively vetoing it by not signing it, thereby depriving lawmakers of the chance to override it in a new vote. By law, he has 10 days from passage of the legislation to wield his veto pen or not sign it if Congress is out of session. In a letter Thursday to House Speaker Dennis Hastert, R-Ill., Clinton's chief of staff John Podesta said the bill ``fails to address some creditor abuses and disadvantages all debtors to an extent unnecessary to stem abuses by a few.'' He said Clinton also objected to the removal of a provision in the Senate-passed bill prohibiting people found to have violated laws protecting abortion clinics from using bankruptcy proceedings to escape fines and civil judgments. Banks, savings and loans, credit card companies and other consumer finance businesses spent some $6 million on donations to political candidates and party-building activities between Jan. 1 and June 30, according to the group Common Cause. The total included $1.7 million from the five U.S. banks with the biggest credit-card businesses: Citigroup, Bank One/First USA, MBNA, Bank of America and Chase Manhattan. - The bills are H.R. 2415 and S. 3486.
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| | Saturday, October 14, 2000 - 04:15 pm Thank you VERY much, Shylock. I hope EVERYBODY reads the entire article, it very nicely explains who runs this country. I wonder what Gore and Bush would do in Clinton's place.
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| | Saturday, October 14, 2000 - 05:05 pm I read this and get sick to my stomach. How much cash do those whores give to all our politicians so they can continue to screw those who lose their jobs, get reorganized or have a boss who says "I woke up this morning and decided I didn't like you".????? On this point, I have to agree with Clinton. It's not abuse that I saw at the Federal Court House. The ones who abuse the system are the rich running to protect their million dollar mansions not the poor or demoralized like me. I hate this crap. What do I have to do to voice my opinion --vote for a moron or an egotistical pandering voteseeker? what a god awful choice.
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| | Saturday, October 14, 2000 - 05:11 pm Bankruptcy reform is coming no matter who the next President is. Note that the article indicates that bankruptcy reform legislation (of slightly differing wording) has passed both the House and the Senate with veto-proof margins. Needless to say if anyone needs bankruptcy ... now is the time.
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| | Saturday, October 14, 2000 - 05:46 pm Thank god I'm all filed and everything.
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| | Saturday, October 14, 2000 - 07:33 pm While I generally disapprove of bankruptcy except as an absolute last resort (as shown by some of my posts here), I am strongly opposed to these reform measures. It's not because I don't believe that there is a lot of abuse. There certainly is, and it's a problem that must be addressed. The reason I oppose bankruptcy reform is because it would be an unwarranted windfall for credit card issuers. They have contributed mightily to the explosion in bankruptcies by their practice of handing out credit cards like Halloween candy. In their quest for interest revenues, they'll give cards to almost anyone - "underwriting standards" is a totally obsolete concept today. I have no sympathy whatsoever to their so called "plight." They deserve no relief.
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| | Saturday, October 14, 2000 - 08:09 pm There is NO reform that will stop abuse. Whatever the new law requires, the wealthy will always have the ability to meet those requirements WITHOUT having to suffer one bit. They'll simply redistribute their assets and income to comply, become disabled, incorporate, whatever it takes. Money buys everything. It's the working stiffs that are going to get it, again. Also, I have not read any of the proposed law. Does anyone know if the debts acquired prior to the new legislation are excluded? I specifically refer to a similar exclusion in the FCRA (see http://www.bayhouse.com/discus/messages/123/643.html?961710380 2. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after the enactment of those amendments, or December 29, 1997.(2) We read this language to mean that a CRA is not required to use the commencement-of-delinquency date mandated by Section 605(c)(1) on an account where the chargeoff or collection ("item of information") was first reported to the CRA ("added to the ... file") prior to that date. Thus, adverse information such as collections or chargeoffs reported before December 29, 1997, are not subject to the new "commencement of the delinquency" provision." I'd like to see this exemption: "Obligations incurred prior to (455 days after the bankruptcy reform is enacted) are not subject to the new "bankruptcy legislation."
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| | Monday, October 16, 2000 - 09:38 pm What makes my blood boil is the intimation that the "$400 hidden tax" is an amount that a typical consumer could look to recoup (presumably in lowered interest charges)if this bill is enacted. Now lemme get this straight.....the bill passes....the credit card companies "save" lots of money by not having to write off as many bad loans that otherwise would go into BK.....the magnamimous banks then PRO-ACTIVELY and VOLUNTARILY lower interest rates across the board so that this insidious "hidden tax" shows up in lessened interest charges to the consumer community...OH HELL YEAH!! I BELIEVE THAT !!! No, dear friends, that extra "hidden tax" simply goes right into the corportate coffers as more profits. Your interest rates will remain the same or go up.
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| | Tuesday, October 17, 2000 - 01:10 am they already have it figured out what percentage of loans will cease performing. the hidden tax is the misery of finding oneself in the predicament of declaring chapter 7 due to illness, reorg or whatever. Now if you are smart, you move to Florida or Texas or any other state that has generous exemptions to protect yourself---unlike my state (MO) which devastates people and makes it harder to rebound.
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| | Tuesday, October 17, 2000 - 01:55 pm It may be a little too pat to figure that if the change will save the company $400 that this money will automatically be passed on to the customer. But it's unlikely that none of it will be passed on either. How did they come up with that $400 number? I don't know. Were they figuring the company would save $600 a person on average and that $400 would be passed on to the consumer? Who knows?
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| | Tuesday, October 17, 2000 - 01:57 pm http://www.cardweb.com/cardtrak/news/2000/october/16a.html It seems that the main thing that stands between a bankruptcy reform bill and no bankruptcy reform bill is the abortion issue.
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| | Tuesday, October 17, 2000 - 04:41 pm Interesting article, I especially like the "Read my lips ..." and pic. One of the things I don't understand is why it will save so much money to have this bankruptcy reform, and on the other hand, the people who already filed and CANNOT discharge again for 7 years, pay through the nose to get credit, even secured credit. Something doesn't add up.
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| | Wednesday, October 18, 2000 - 07:18 am What I think is also funny is the $400 'tax' impact to the ecomony. We all know this 'savings' would not be passed onto the consumers. Banks will lose out on a few billion in profits. Actually, scratch that. They will take their tax deductions on the loses, and only lose a couple of million in less profits. Yet, those people who have filed bankruptcy, now will have to pay cash (at least at first), but yet they will still need to purchase things. With not paying wasted interest to money-sucking banks, they will actually have more money to purchase that much needed washing machine etc. Thereby stimulating the economy and actually creating new jobs, and actually preventing more people from being down-sized and filing bankruptcy. The only losers in a BK is the bank's shareholders.
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| | Thursday, October 19, 2000 - 07:15 am The worst part is John McCain voted for this. I thought that he wanted no part of "soft money" contributions from lobbyists? Oh well...
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| | Thursday, October 19, 2000 - 07:18 am When this house of cards tumbles (the way it's looking of late I am betting on it), I wonder what our "elected officials" will do? These kinds of laws will f everybody if we fall into another depression (all it takes is one of the 3 major banks to collapse). If that happens, bet your money that the scumbags responsible will have class warfare on their hands. This isn't a threat or a rant, but the obvious prediction of bad things to come.
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| | Sunday, December 10, 2000 - 12:17 pm This story is posted under the Fair Use clause of copyright law. Retransmission or other use for commercial gain is strictly prohibited. WASHINGTON (AP) - Defying President Clinton's veto promise, the lame-duck Senate has sent him a bankruptcy overhaul bill that would make it harder for people to erase credit card and other debts in court. Senators, by a 70-28 veto-proof vote, on Thursday approved the most sweeping bankruptcy law changes in 20 years. Supporters, including the banking and credit card industries, have pushed for the changes over the past three years. Clinton favors overhaul of the bankruptcy laws in principle but thinks the current bill is unfair to ordinary debtors and working families that fall on hard times. ``President Clinton is disappointed that the Senate failed to pass balanced bankruptcy reform that addresses real abuses without tilting the playing field against those who turn to bankruptcy as a last resort,'' White House spokesman Patrick Dorton said after the lopsided vote. Voting for the bill were 53 Republicans and 17 Democrats; all the opponents were Democrats, including Connecticut's Joseph Lieberman, the vice presidential candidate. Sen. Peter Fitzgerald, R-Ill., voted present to avoid a potential conflict of interest because his family owns a bank. Sen. Mary Landrieu, D-La., was absent. The House and Senate passed competing versions of the legislation, both by veto-proof margins. The current compromise measure cleared the House by voice vote on Oct. 12. For much of the year, lawmakers have sought to reach a deal on the legislation, which has divided Democrats. Supporters in both parties have received millions of dollars in political contributions from banks and credit card companies this election year. In the final hours of Senate debate on Thursday, one longtime opponent, Sen. Paul Wellstone, said the bill was ``harsh'' and he accused the banking and credit card industries of ``blatant hypocrisy'' for aggressively soliciting new business. Wellstone, D-Minn., cited an academic study published in the spring that found medical bills accounted for about 40 percent of personal bankruptcy filings in 1999. The legislation would establish a complex mathematical formula for determining whether debtors can repay part of their debts under a court-supervised plan rather than be allowed to have them dissolved. Consumer groups, unions and other opponents contend the legislation would hurt families hit by job losses, catastrophic medical expenses or other unforeseeable hardships that push them over the edge financially. They also point to single mothers and their children who need alimony and support payments from bankrupt fathers. The banking and retail credit industries, meanwhile, were jubilant. The American Financial Services Association said the legislation ``still allows any American to seek bankruptcy protection.'' The U.S. Chamber of Commerce urged Clinton to abandon his veto pledge. Proponents cite a rapid rise in personal bankruptcy filings in recent years, reaching 1.4 million in 1998, as evidence of rampant abuse of the bankruptcy court system. ``This bill strikes the balance needed to strengthen the safety net for people who need a fresh start after a hardship, while closing the loopholes exploited by big spenders to walk away from debts they could repay,'' said a leading sponsor, Sen. Charles Grassley. Grassley, R-Iowa, said bankruptcy abuse creates a hidden tax of at least $400 a year on each American family in the form of higher interest rates passed on by consumer credit businesses and other charges. Clinton could choose to wait until the lame-duck congressional session adjourns before effectively vetoing the legislation by not signing it, thereby depriving lawmakers of the chance to override the veto in a new vote. By law, he has 10 days from passage of the legislation to use his veto or refuse to sign it if Congress is out of session. - The bill is H.R. 2415 Do you Yahoo!?
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| | Monday, December 18, 2000 - 11:52 am Appreciate this update, any news? And, "The legislation would establish a complex mathematical formula for determining whether debtors can repay part of their debts under a court-supervised plan rather than be allowed to have them dissolved." What is this formula? Is it going to be like Fair Isaac's big secret or is it published somewhere?
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| | Monday, December 18, 2000 - 03:20 pm From what I have read, Clinton will wait until Congress ajourns to veto it. So it will only be a matter of time before the new Congress sends it to Big Business' best bud, Dubya to sign into law. What cracks me up is Reagan, the most idolized Conservative EVER was pro-bankruptcy because his conservative son Michael went through one. I guess the financial industry is getting what it finally wants... www.opensecrets.org to look up YOUR congressman or Senator's donations and from whom and how much. I love this site!
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| | Monday, December 18, 2000 - 03:22 pm P.S.-Did I mention that opensecrets has links to the politician's websites AND their email. Also, their addresses and phone numbers. DISCLOSURE-I am in no way affiliated with this site, just want people to use it as a tool to learn more about their elected "representatives".
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| | Monday, December 18, 2000 - 04:43 pm Do you Yahoo!? Bankruptcy Bill at a Glance By The Associated Press, Highlights of bankruptcy legislation approved Thursday by the Senate and sent to President Clinton: -Applies a new standard for determining whether people filing for bankruptcy should be forced to repay their debts under a court-approved reorganization plan rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25 percent of the debt over five years, a reorganization plan generally would be required. -Limits repeat bankruptcy filings. -Requires credit card companies to explain to customers in their monthly statements how long it would take to pay off balances if they make only the minimum required payments. Bill statements also would include a toll-free phone number for customers to get information on how long it would take them, personally, to pay off their balances. -When low-interest, introductory ``teaser'' rates on credit cards are used to lure new customers, they would have to be told when the higher rates will take effect and what they will be. -Gives highest priority among debts to child support payments, putting them ahead of credit card debt and other obligations. -Protects quality of care for hospital and nursing home patients when the health care facilities file for bankruptcy protection. -Expands farmers' eligibility for bankruptcy protection and makes the federal government last on the list of creditors when farmers sell farm assets to raise money to pay debts. -Imposes a $100,000 federal cap on homestead exemptions for home equity acquired within two years of filing for bankruptcy protection, in an effort to prevent wealthy debtors from shielding their assets in luxury homes in bankruptcy proceedings. It also requires that people establish residency in a state two years before filing for bankruptcy protection in order to claim that state's homestead exemption. Florida and Texas allow unlimited homestead exemptions, which debtors can use to keep their homes' value from being counted among their assets in bankruptcy proceedings.
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| | Monday, December 18, 2000 - 05:05 pm Thanks again. "If a debtor is found to have sufficient income to repay at least 25 percent of the debt over five years." On first glance, that doesn't sound too complicated. However, it's the missing FINE PRINT that worries me. I quickly ran some numbers: Debt 25% per month 20,000 5,000 83.33 100,000 25,000 416.67 Those 83 bucks don't seem like much. But I assume that the effect of that plan would be the same as the current Ch. 13. NO new loans, mortgage eligibility after ** 7 ** years?
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| | Friday, December 22, 2000 - 12:49 am By DEB RIECHMANN, Associated Press Writer WASHINGTON (AP) - President Clinton vetoed legislation Tuesday that proposed the most sweeping changes in the bankruptcy law in 20 years because he said it was unfair to ordinary debtors and working families who fall on hard times. Supporters of the bill, including credit card companies, have pushed for three years to pass a bill to overhaul the nation's bankruptcy system. Clinton also favors revamping the bankruptcy laws but thinks the current bill is not evenhanded. ``I would have signed a balanced bankruptcy reform bill that addressed known abuses without tilting the playing field against those debtors who genuinely turn to bankruptcy for a fresh start,'' Clinton said in a statement released Tuesday evening. The president said the bill would allow debtors who own expensive homes to shield their mansions from creditors while debtors with moderate incomes, especially renters, must live frugally and comply with rigid payment plans for five to seven years. ``This loophole for the wealthy is fundamentally unfair and must be closed,'' Clinton said. Clinton also criticized the bill's failure to address the ``abusive use'' of the bankruptcy laws by anti-abortion activists ``who espouse and practice violence at health care clinics'' and then use bankruptcy as a shield against liability. An early version of the bill would have barred such use of the bankruptcy system, but that provision was dropped in the final legislation that passed Congress. By leaving the Bankruptcy Reform Act of 2000 unsigned, the president issued a ``pocket veto,'' the fourth indirect veto of his administration. By waiting until the lame-duck congressional session adjourned before vetoing it, he deprived lawmakers of the chance to override the veto. The veto drew criticism from Sen. Chuck Grassley, R-Iowa, a leading sponsor of the legislation. ``President Clinton let the American people down by pocket vetoing the bipartisan bankruptcy reform bill,'' Grassley said Tuesday. ``This veto means that financially troubled family farmers don't have protection against foreclosure, that residents of nursing homes that file for bankruptcy can be evicted in the middle of the night and that consumers will continue to pay higher prices for goods and services due to the exploding number of bankruptcies'' Proponents cite as evidence of rampant abuse of the bankruptcy court system a rapid rise in personal bankruptcy filings in the mid-1990s, which reached a record 1.4 million in 1998. The legislation would have established a complex mathematical formula for determining whether debtors can repay part of their debts under a court-supervised plan rather than have them dissolved. Consumer groups, unions and other opponents contended the legislation would hurt families hit by job losses, catastrophic medical expenses or other unforeseeable hardships that push them over the edge financially. They also pointed to single mothers and their children who need alimony and support payments from bankrupt fathers. The banking and retail credit industries strongly backed the measure. The American Financial Services Association said the legislation retained protections for Americans to seek bankruptcy protection. The U.S. Chamber of Commerce had urged Clinton not to veto. Opponents of the legislation, including Sen. Edward Kennedy, D-Mass., said the president's veto was no surprise and well-deserved. ``Next year, I hope the credit card industry will revise its punitive legislative proposal,'' Kennedy said Tuesday. ``We should pass a balanced bill that deals effectively with existing problems, without creating new abuses.''
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| | Friday, December 22, 2000 - 09:00 am Next year, Bush will sign anything that benefits corporate. I have yet to see that "complex formula" included in that bill. I don't consider my earlier calculations posted here "complex," more like 5th grade math. I'm missing something? Maybe I'll find out next year, this legislation will certainly be back for Bush's signature.
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| | Tuesday, December 26, 2000 - 11:30 pm Well, it still has to go back through the new 50/50 Senate. I find it funny that Grassley says its all about poor farmers and nursing home residents. First off, this was designed so the ultra-rich can keep their obscene mansions when their world turns upside down. Nursing home residents? Most could NOT AFFORD to file under the new terms of the law, therefore, they would probably run out of money and be out on the street anyway! If we truly head into a prolonged recession and this thing becomes law, I foresee people going to mental extremes (before I filed and when i was unemployed and broke, I thought long and hard about dark things, suicide included). Again, the right wing of the Republican party is full of crap and only cares about the richest 5% of our country. The Dems aren't far behind. Bravo, Bubba...One of the smarter things you've done as president.
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| | Wednesday, December 27, 2000 - 02:38 am Bubba only vetoed it because there was nothing in it for him. All politicians are worthless shams.
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| | Wednesday, December 27, 2000 - 11:35 am Agreed...
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