effect of new bk law

[cjbrown929]

What is the name of your state?California

Presently, after 7 years (possibly 10 yrs w/ bk), negative (and positive) credit accounts cease appearing on the three credit reporters, assuming that one has not made any payments. In other words, if you had, say, a medical collection account, and two credit cards that had gone to collection, and even a satisfied auto loan, after 7 years, if you ran your credit and you hadn't applied for protection under any bk's (7, 11, 13) they shouldn't show up.

Will this be the case with the new law? It occurs to me that given the choice of simply "disappearing" credit wise for 7 years versus spending the rest of your life paying a credit card bill (hey, I know, if you used it, you should pay for it-it's just the unbelievable penalties and interest rates), many people will opt to disappear.

 

[Who's Liable?]

The difference is with the new laws, getting a BK 7 will nearly be impossible... No more are the days when you can file and get ALL your debts(minus SL) discharged...

With the new law, if you make more then your states median income, you are automatically pushed into a BK13, no ifs' ands' or buts', plus on top of that you will be required to attend credit counsing and other forms or "counseling" at your OWN expense, that doesn't even include the payment plan that you will most likely have for the next 3-5 years, and if you default on that payment plan, your BK 13 will be null and void, and you are completely screwed...

 

[cjbrown929]

the evil that men do

thanks for reply.

I am unclear on the mechanics of being forced into a chapter 13. Would this be the result of voluntarily filing for bankruptcy, or can you be FORCED to file for bankruptcy according to certain criteria? In either case, any lawmaker who voted for this is not a friend of the people and deserves to be immediately recalled or voted out of office, no questions asked. What they have done is to reimpose involuntary servitude, where the "masters" can arbitrarily "whip" their slaves with sky high fees and penalties. RECALL THEM ALL. You congressman ought to be ashamed of yourselves.

Sorry, I got on a bit of a roll. I'd still like to know the answer to my question. Thanks

 

[bigun]

BK reform will have a means test. If your income is above the median for your state, the only bk you'll be eligible to file is a Chapter 13. Plus, when you start to figure your living expenses to get to your disposable income, you use the IRS tables for your region as opposed to actual expenses.

 

[Who's Liable?]

thanks for reply.

I am unclear on the mechanics of being forced into a chapter 13. Would this be the result of voluntarily filing for bankruptcy, or can you be FORCED to file for bankruptcy according to certain criteria? In either case, any lawmaker who voted for this is not a friend of the people and deserves to be immediately recalled or voted out of office, no questions asked. What they have done is to reimpose involuntary servitude, where the "masters" can arbitrarily "whip" their slaves with sky high fees and penalties. RECALL THEM ALL. You congressman ought to be ashamed of yourselves.

Sorry, I got on a bit of a roll. I'd still like to know the answer to my question. Thanks

You cannot be forced to file BK at all... You're mixing up my post...

IF you CHOOSE to file BK, each state looks at certain criteria... For example, my state's median income is 40K... That means in order for you to file BK7(complete discharge of debts) you have to make LESS than 40K.. If you make more than 40K, and you still want to file BK, you will be forced into a BK13 , and not a BK 7...

On top of that, this change was heavily lobbied by the Credit Card companies, and not your congressman... You should be mad at CC companies...

 

[Ladynred]

That means in order for you to file BK7(complete discharge of debts) you have to make LESS than 40K.. If you make more than 40K, and you still want to file BK, you will be forced into a BK13 , and not a BK 7...

IN actuality its not that simple, the means test is actually a set of criteria. You COULD be above your state's median income and still qualify for a Ch 7, but it'll be MUCH, much harder.

If you can't 'pass' the means test, you'll be denied a Ch 7 and your only option, if you want bankruptcy protection (can't call it that after 10/17 !), then you'll be stuck with a very nasty Ch 13 for FIVE years.

 

[cjbrown929]

new bk laws

I thank all for replies.

who's liable: while I appreciate your point, it must be understood that CC companies do not represent the will of the people except through their donations to "like minded" congresspeople, a setup that guarantees a decisive voice for the "haves" rather than the entire constituency. If these congresspeople vote for a bill because of heavy back door lobbying rather than their sincere interpretation of their constituency's desires, the voters who put him or her in office can "correct" the problem the next time that congresspersons name shows up on any ballot.

By the way, with the new law, if a person doesn't use his'her credit for 7 years, would negative (and positive) accounts no longer be reported as is the case now?

 

[toughluck73]

You cannot be forced to file BK at all... You're mixing up my post...

IF you CHOOSE to file BK, each state looks at certain criteria... For example, my state's median income is 40K... That means in order for you to file BK7(complete discharge of debts) you have to make LESS than 40K.. If you make more than 40K, and you still want to file BK, you will be forced into a BK13 , and not a BK 7...

On top of that, this change was heavily lobbied by the Credit Card companies, and not your congressman... You should be mad at CC companies...

Actually, you can be forced into bankruptcy. It is rarely used but, your creditors can ask the Court to make an Order that a person is bankrupt.

 

[Who's Liable?]

I thank all for replies.

who's liable: while I appreciate your point, it must be understood that CC companies do not represent the will of the people except through their donations to "like minded" congresspeople, a setup that guarantees a decisive voice for the "haves" rather than the entire constituency. If these congresspeople vote for a bill because of heavy back door lobbying rather than their sincere interpretation of their constituency's desires, the voters who put him or her in office can "correct" the problem the next time that congresspersons name shows up on any ballot.

By the way, with the new law, if a person doesn't use his'her credit for 7 years, would negative (and positive) accounts no longer be reported as is the case now?

Believe whatever you want...

 

[cjbrown929]

credit question

California

As always, I appreciate all replies. I may be misphrasing my question, or perhaps I am posting in the wrong arena. When I worked as a car salesman, I ran thousands of people's credit through the various reporting companies (in the old days, TRW, CBI, and, uh, I can't remember). Younger people, especially just over 18 would likely have little or no reportable credit. Folks who were in the 30, 40, and 50+ range with no reportable credit had frequently experienced problems and rather than filing for bk, had gone "underground" for 7 years which effectively wiped their slate clean. Will people who don't file for bk still be able to clean their slate similarly, or does the new bk law change things?

 

[Ladynred]

The new bankruptcy law makes NO changes to the FCRA and the way things are reported to the bureaus or the reporting period.

It IS speculated that a lot of people will 'go underground' because bankruptcy will be to harsh, too expensive, or whatever. Unfortunately, having the derogs drop off your credit report doesn't relieve people of their debts - they just don't show on the credit reports anymore.

This bill was bought and paid for by the credit card and banking industry thru millions in 'campaign contributions'.. to the Congressmen. MBNA did a real nice job completly BUYING one Senator with actions they would NEVER consider for a normal consumer. The men and women who sit in the House and Senate CAN be held to blame - for being bought. They sold us out with their own greed and their own agenda's.

Toughluck - the new law will make it virtually impossible for anyone to force an involuntary bankruptcy on anyone.

 

[cjbrown929]

the will of the people?

Ladynred: Thanks for your response. You and I are of a like mind in terms of this dastardly change in bk laws. Someone who posted earlier said that it wasn't the fault of the congresspeople who voted for the change, but rather the evil lobbyists, a theory that qualifies as one of the weirdest ideas I've ever heard.

I believe that this new law will effectively make many honest users of credit who, for reasons beyond their control, fell behind on their payments "indentured servants", as credit companies whimsically use high interest rates and ridiculous fees to pad their bills to the point that it is virtually impossible to pay. I don't think it's possible that the CC industry is a moneyloser, though.

I think that every congressperson who voted for changing the law should be voted out of office or recalled if possible.

 

[Ladynred]

I think that every congressperson who voted for changing the law should be voted out of office or recalled if possible.

I'll second that !!!

 

[Who's Liable?]

I believe that this new law will effectively make many honest users of credit who, for reasons beyond their control, fell behind on their payments "indentured servants", as credit companies whimsically use high interest rates and ridiculous fees to pad their bills to the point that it is virtually impossible to pay. I don't think it's possible that the CC industry is a moneyloser, though.

Interesting point...

I personally believe that money education should be taught in school at a young age... There are far to many recent high school graduates with high GPA who know nothing about money... Then thay go to college and get a barrage of CC offers, not knowing(or realizing) that the money they spend has to be repaid somehow... By the time they realize that they actually NEED to pay back what they spent on pizzas and beer, it is already too late...

 

[mrgg1111]

Some people would have income over the state’s mean limit, like over $40K, but their disposable income could be high like paying a lot for child support (assuming many kids) so they would not have much left each month. So those people still need to go for CH 13 instead of CH 7 with the new law?

Anyone knows?