What part of a contract does Harry Reid not understand?

[il Padrino Ute]

Harry is ticked that there is opposition to his wanting bankruptcy judges to have the power to rule that a person who files bankruptcy doesn't have to stick to the terms of the contract when he bought his house.

Boo hoo, Harry. It's a bad idea.

[Cali Coug]

Originally Posted by il Padrino Ute

Harry is ticked that there is opposition to his wanting bankruptcy judges to have the power to rule that a person who files bankruptcy doesn't have to stick to the terms of the contract when he bought his house.

Boo hoo, Harry. It's a bad idea.

I do know this much: the current bankruptcy laws, brought to you by the Republican majority, are a disaster.

The laws now basically provide that a person declaring bankruptcy must repay whatever portion they can repay over the course of a 5-year period following the bankruptcy. This is brutal for those already destroyed by the effect of having a bankruptcy on their credit and losing whatever assets they had to cover the debts they owed.

It is particularly unfair to consumers because, for bank loans, for example, the likelihood of default is already factored into the bank loan rate. For consumers starting a business, the SBA is very often a guarantor of as much as 75% of the bank's loan, so in the event of default, the bank is made 100% whole. On top of being made whole, the bank has been charging a higher interest rate to cover itself for the chance of a default.

The SBA charges a fee to all who use the SBA that is effectively insurance for the loan falling into default. They make a ton of money on those fees. Then, following default, the SBA sicks the bank on the consumer until the bank can get whatever they can out of the person, then the SBA pays the bank whatever is left on the debt up to the guarantee amount, then the SBA sells the loan to a third party (so the SBA doesn't lose much) who spends the next while attempting to collect on the loan, forcing the person into bankruptcy, where the person is then obligated to pay that third party for 5 years.

The current law sucks for consumers and is bad for business. Bankruptcy laws are designed to operate as a safety blanket for risk takers and to give them more incentive to start up businesses that could benefit the economy.

[il Padrino Ute]

The current law is fine. Consumers find themselves in financial trouble because they live beyond their means.

[Cali Coug]

Originally Posted by il Padrino Ute

The current law is fine. Consumers find themselves in financial trouble because they live beyond their means.

If that is your argument, you clearly do not understand the issues befalling many people who find themselves in bankruptcy court.

And if that is your argument, there is no need for bankruptcy court. Debtors prison would be preferrable.

[il Padrino Ute]

Originally Posted by Cali Coug

If that is your argument, you clearly do not understand the issues befalling many people who find themselves in bankruptcy court.

And if that is your argument, there is no need for bankruptcy court. Debtors prison would be preferrable.

I don't understand the issues because I have never had that problem. I realize that there is a rather substantial number of people who file as a result of mounting medical bills, but how many people file because they do live beyond their means? It seems to bother you that that is an accurate statement.


And I like how you think you know what I would prefer. It is laughable.

[Cali Coug]

Originally Posted by il Padrino Ute

I don't understand the issues because I have never had that problem. I realize that there is a rather substantial number of people who file as a result of mounting medical bills, but how many people file because they do live beyond their means? It seems to bother you that that is an accurate statement.


And I like how you think you know what I would prefer. It is laughable.

I suppose I don't know what you would prefer. I was assuming you were a logical individual, but perhaps I have assumed too much.

What bothers me is that what you said isn't an accurate statement. Which is why I noted that you clearly do not understand the problem with the new bankruptcy law.

What purpose do you think bankruptcy laws serve (or should serve)?

[creekster]

But if the banks don't have as many defaults, won't htye be able to lower their rates? IOW, if they can predict that of the likely percentage of bad debt another certain likely percentage will return to them that woudl not have returned to them before, they won't need to allow for that in their rate setting, right?

I was not abiug fan of some of the changes that were made to the law, but I am not sure if that is terribly persuasive to me. I am sure you will tell me why I am worng, however.

[Tex]

Originally Posted by Cali Coug

I suppose I don't know what you would prefer. I was assuming you were a logical individual, but perhaps I have assumed too much.

Oh, il Pad, Cali drug out the old "you are not a logical individual" line, so you must be getting to him. Keep it up!

The bankruptcy bill was passed in a Republican Congress, but with significant bi-partisan support including, if memory serves, Harry Reid. So you can let your logic chew on that, Cali.

More importantly, it closed loopholes for people who irresponsibly used bankruptcy to get out of paying mountains of bills, leaving responsible consumers with the bills. I don't have any problem with it at all.

[Cali Coug]

Originally Posted by Tex

Oh, il Pad, Cali drug out the old "you are not a logical individual" line, so you must be getting to him. Keep it up!

The bankruptcy bill was passed in a Republican Congress, but with significant bi-partisan support including, if memory serves, Harry Reid. So you can let your logic chew on that, Cali.

More importantly, it closed loopholes for people who irresponsibly used bankruptcy to get out of paying mountains of bills, leaving responsible consumers with the bills. I don't have any problem with it at all.

If I was a partisan hack, it would be difficult to criticize something Reid supported (House Democrats, not that you care about being accurate, voted 125-73 AGAINST the bill, and Senate Democrats voted 25-18 against the bill).

Fortunately, I am not bound by the constraints that bind you and I can think on my own. Reid was wrong to support the bill. It is a bad idea that discourages entrepreneurship, unduly harms consumers, and penalizes those who are the victim of bad circumstances.

[MikeWaters]

Cali, do you think it is bad that I will never be able to lose my student loans in bankruptcy? Why the exclusion there? Totally unfair.