Bankruptcy "reform".....they're at it again.... [View All]

WASHINGTON, Jan 25 (Reuters) - U.S. Senator Charles
Grassley is expected to reintroduce bankruptcy reform
legislation this week as Congress tries once again to make it
tougher for consumers to abandon their debts.
An aide to the Iowa Republican said he planned to introduce
bankruptcy reform legislation as early as Tuesday. The
legislation will be similar to the bill passed by the U.S.
House of Representatives last year.
The Senate is expected to consider bankruptcy reform early
in the session, staff said.
Bankruptcy reform legislation has come close to passage
several times in recent years -- only to stall at the last
minute. Both houses of Congress have approved measures that
would make it harder for consumers to invoke bankruptcy to
avoid paying off their debts, a key goal for credit card
companies.
Bankruptcy filings were near record highs in 2004.
Commercial and personal bankruptcy filings totaled 1.62 million
cases in the year ended Sept. 30, 2004, compared with 1.66
million the previous year, according to the Administrative
Office of the U.S. Courts.

LENDERS WANT "MEANS" TEST
Among provisions supported by the financial services
industry is a "means" test for individuals seeking bankruptcy
protection as a way to eliminate their debts.
Under such a provision, families whose incomes are above a
certain level would not qualify for Chapter 7 bankruptcy
protection. Instead, they would fall under Chapter 13 and be
forced to repay some debt while retaining some assets.
Under bankruptcy law, Chapter 7 calls for the liquidation
of assets but allows filers to keep some property such as a
primary residence. Chapter 12, for family farmers, and Chapter
13, for individuals, call for an adjustment of debts. Filers
are required to enter a repayment plan, but allowed to keep
their assets.
Credit card companies, retailers and auto lenders argue the
legislation is needed to stop consumers from racking up debt
and then turning to the courts with bankruptcy filings to avoid
repayment.
But consumer advocates say the proposed bankruptcy reform
measures simply reward businesses that aggressively market
consumer loans.


This needs to get re-defeated...unless you are keen on the return of Debtors Prisons.....