S 256 - Bankruptcy Reform Bill

[Moooooo]

Official Title of Legislation:

S 256: A bill to amend title 11 of the United States Code, and for other purposes.

Project Vote Smart's Synopsis:

Vote to pass a bill that imposes a means test for individuals wishing to file for bankruptcy. The means test determines whether the individual would be allowed to file under Chapter 7, essentially exonerating their debts after they have liquidated their assets, or if they would be forced to file under Chapter 13, requiring them to pay back creditors on a court approved time table.

Highlights:

- Declares a debtor eligible for Chapter 13, as anyone financially capable of paying back their creditors at a rate that still allows them to earn above their state's median income

- Places domestic support obligations such as child support and alimony amongst the first priority claim category of non-dischargeable debts on a debtor filing for bankruptcy

- Allows special accommodations for active-duty service members, veterans, and those with serious medical conditions

- Requires debtors to pay for and attend credit counseling prior to filing for bankruptcy

- Caps home equity protection at $125,000 if the debtor purchased a house within 40 months of filing for bankruptcy

- Establishes requirements that halts the one-year stay against credit collectors if a debtor chooses to file bankruptcy within one year of an earlier filing

- Requires credit cards to include warnings, examples, and a toll-free number to address interest rates, repayment plans, and fees on monthly statements

- Alters prior bankruptcy codes Chapter 11 and Chapter 12, which apply to small-business and healthcare business bankruptcies and mandate that the debtor file a reorganization plan

Vote Smart Description...

[A18]

Great legislation. I'd vote yea.

[opebo]

No, of course.  Turns the State into the debt-collector for every usurer in the land.  Why should taxpayers pay for this anti-market function?  After all, if a lender lends foolishly, that is his own fault, and he shouldn't expect the Welfare State to take care of him.

[MODU]

I like most of the bill, so I would have voted for it.

[TeePee4Prez]

Not sure.  A lot of wealthy people whorde assets then declare bankruptcy.  However, it has been argued the medical exceptions aren't too good in this bill so I have to read it further to make a decision.

[The Dowager Mod]

Nay of course.

[The Duke]

Yea.  Why shouldn't people be asked to pay back their debts?

[Emsworth]

Yea, although it does not go far enough.

[dazzleman]

Yes, I would have voted for it.

All consumers pay the cost of those who irresponsibly use credit to buy things they cannot afford.

Something should also be done to discourage banks and credit card companies from giving credit to those who cannot afford to pay it back, but the bottom line is that if a person gets deeply into debt for reasons other than job loss or catastrophic illness, he usually has only himself to blame.  A bank can extend you credit, but cannot get you to use it.  I could be bankrupt many times over if I used all the credit banks are willing to extend to me, and then went out and spent the money.

[nini2287]

I like most of the bill, so I would have voted for it.

[Moooooo]

Nay - the leading cause of bankruptcy in this country is overpriced medical bills.