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Cadman
While I was looking thru sites on information about the hurricane, I came to an article that seems the media is not paying attention to that has direct correlation to Katrina. On October 17,2005 the new bankruptcy bill goes into effect. One of the proposals that was offered but rejected back during the bankruptcy bill earlier this year, was measures to protect victims during natural disasters. Meaning all the people in the effected areas could have more problems to face in the near future, unless both houses of congress allow a vote on this piece of legislation.

Financial Relief

QUOTE
Rep. John Conyers, Jr., Rep. Mel Watt, Rep. Jerrold Nadler, and Rep. Sheila Jackson Lee announced Thursday that they will introduce legislation to protect the thousands of people left financially devastated by Hurricane Katrina from being penalized by anti-debtor provisions contained in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, scheduled to take effect on October 17, 2005:

"We are concerned that just as survivors of Hurricane Katrina are beginning to rebuild their lives, the new bankruptcy law will result in a further and unintended financial whammy. Unfortunately, the new law is likely to have the consequence of preventing devastated families from being able to obtain relief from massive and unexpected new financial obligations they are incurring and by forcing them to repay their debt with income they no longer have, but which is counted by the law.


Hopefully both sides will support this because this is the last thing the victims need is even more financial problems stacked on the ones they already are going to be in for.

Questions:

Do you think Congress should revisit this legislation and pass it?
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Vibiana
QUOTE(Cadman @ Sep 2 2005, 04:14 PM)
Do you think Congress should revisit this legislation and pass it?
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I don't think Congress should have passed the earlier bill in the first place.

I have declared bankruptcy twice. Both times were a result of catastrophic circumstances -- NOT being a deadbeat. The vast majority of bankruptcies are related to medical bills, not credit card debts. The earlier bill is just Dubya's kiss-up to the banking industry, anyway.
AuthorMusician
Do you think Congress should revisit this legislation and pass it?

Yes, however, I don't think that's going to happen. Katrina has devistated many lives but not enough to make Congress as a whole respond by liberalizing the bankruptcy laws.

Hopefully, the bankruptcy laws won't affect too many victims of Katrina. If your primary assets have been washed away, then there are few things to liquidate to pay off old debt. Ergo, Chapter 7 has to be used. Chapter 13 only works if the filer has an income.

Heres a source of information about bankruptcy for all the states:

State Bankruptcy Laws

If a victim did have assets (such as a house) wash away, and the house was insured against flood damage, there might be an attempt to collect the insurance money through either Chapter 7 or Chapter 13. That might sway some opinions in the south, but I doubt enough to swing the south toward the Demos in Congress.

The mention of medical bills brings up the real pressure that has the potential of changing something -- hopefully, it will be the way we do health care in this country. If health care ruins enough people financially, then the pressure to change will be there.

Indirectly, the tightening of the bankruptcy laws might lead to meaningful reform. I don't think a single disaster limited to Gulf coastal areas is enough.
Bill55AZ
I can agree that such a situation should be revisited by Congress, but only once per person per site. I don't think we should encourage rebuilding in a flood prone area unless the persons/entities doing so have the funds to self insure the property.

As for the medical bills comment, we did hash that one over quite well, and did so on a lot of doctored data, pun intended, as it was a medical doctor who interpreted the raw data to her own satisfaction and lied big time while doing so, claiming around half of all bankrupcies were in part due to high medical bills. Others took the same raw data and found that it was closer to 25% of bankruptcies that had substantial medical bills contributing to the debt.

If there is any time we can use the word "majority", it is most likely to be that a majority of bankruptcy filings are due to a lack of common sense when it comes to dealing with money, debt, and personal responsibility.

Since that debate died its slow death, I have witnessed a near bankruptcy by someone who has already been through that process, another that lost their home because they took out second mortgages to buy a new truck and a new boat and then lost one of their 2 jobs in the family, and another who knew his business was failing, yet hung on for 2 more years using his credit cards to meet payroll while failing to pay the taxes and social security on his employees.
Not one of those 3 had any pending medical bills.

I would like to think that New Orleans can be rebuilt, but with the idea that the flooding WILL be repeated. Certainly the city fathers can take this as an opportunity to correct some of the many past mistakes made by all levels of government involved in the making of this catastrophe.

Otherwise, they only get this one chance to rebuild at taxpayer expense.
AuthorMusician
QUOTE
I would like to think that New Orleans can be rebuilt, but with the idea that the flooding WILL be repeated. Certainly the city fathers can take this as an opportunity to correct some of the many past mistakes made by all levels of government involved in the making of this catastrophe.

Otherwise, they only get this one chance to rebuild at taxpayer expense.


Bill55az,

Do you also extend this to Arizona wildfire victims? The wildfires will be repeated, and it's only a matter of time, eh?

Here we have people and businesses that will likely head into bankruptcy due to not heeding the common sense idea that all income is subject to evaporation. I guess if the economic players as a whole were using common sense, credit would never be used for anything, not in personal finance or business.

At least the purchases of big-ticket items like trucks and boats can be liquidated in either form of personal bankruptcy, and also the forms for business should the truck or boat be used for things like home renovation or fishing enterprises. Maybe it's common sense to never buy anything on credit that depreciates over time.

Well, just as the Congress won't be swayed by Katrina, the dealerships and lending institutions won't be swayed by bankruptcies. I can still see health care as becoming an issue that could change Congress. Where Katrina hit only in the south costal areas, health care hits everyone across the board.

This is not to say that Katrina won't have its ripples throughout the nation's economies. All this help costs money, and someone has to pay.

As we shake a finger at the NO city leaders, we might also want to remember who pushes for more land on which to build. Around here, we call these folks developers, and some of them do deserve the finger -- shaken, that is.

Thinking along these lines, we might want to get our fingers ready to shake at mortgage bankers who push the highly risky types of financing these days to fill those houses built by the developers who buy the kinds of city governments we get. Bankruptcies through overextending on housing could also be a push that changes Congress.
Bill55AZ
QUOTE(AuthorMusician @ Sep 5 2005, 02:53 PM)
QUOTE
I would like to think that New Orleans can be rebuilt, but with the idea that the flooding WILL be repeated. Certainly the city fathers can take this as an opportunity to correct some of the many past mistakes made by all levels of government involved in the making of this catastrophe.

Otherwise, they only get this one chance to rebuild at taxpayer expense.


Bill55az,

Do you also extend this to Arizona wildfire victims? The wildfires will be repeated, and it's only a matter of time, eh?

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Fire vs. flooding? Maybe it isn't quite apples and oranges but there is a difference.
Fire insurance is a lot cheaper to come by than flood insurance, even in California.
Perhaps you have some info that says wildfire victims in AZ, CA, etc. were helped by the taxpayer above and beyond what their insurance companies paid? I know at least one who lost his summer home that will argue that.
Houses can be built to be fire resistant, but flood resistant? I remember a helicopter flight shown on TV after the Oakland fire, one house stood alone, with no visible damage, while all the others around it were gone. That house did not have combustible construction materials on its exterior. The roof was tile, walls were stucco. My guess is that when the neighbors rebuilt, the smart ones went with tile and stucco. But there is nothing that can be done in an area like NO except to either move the entire town (to where?) or at least move the residential parts to higher ground.
Common sense and personal responsibility should prevail, but in a disaster of the New Orleans level, I don't see how the taxpayer is going to escape paying a part of it. Either the victims get help rebuilding their homes and lives, or they become long term welfare recipients.
Developers and bankers would not be doing their thing unless there was a market for their services. People have to have a place to live. Some lessons have to be learned the hard way, and if the builders/bankers/developers end up losing part of their investment, even they might learn a thing or two, right along with those who choose to live in flood prone areas.
Having said all that, even if bankruptcy laws are not eased for this situation, you can bet that there will be some kind of government help for the individual victims
as well as for the city of New Orleans, state of LA, and AL, and MS, and so on.
AuthorMusician
QUOTE
Having said all that, even if bankruptcy laws are not eased for this situation, you can bet that there will be some kind of government help for the individual victims as well as for the city of New Orleans, state of LA, and AL, and MS, and so on.


So the argument is that I can bet on there being some kind of government help for individual victims of Katrina, and therefore the bankruptcy laws can be safely allowed to go on the strict side of things.

Okay, that's fine. Just keep in mind that the new bankruptcy laws don't apply to people with zero or harshly lowered incomes. When you end up with plenty of nothing, that's what creditors get even under the new laws. Nothing from nothing means nothing.

Yeah, wildfire is a Granny Smith and flood is a Golden Delicious. Either one can wipe out primary residences rather quickly, with flood usually leaving salvagable structures behind. You're likely right that flood insurance for an area under sealevel and on the coast isn't available. It isn't in Colorado in identified flood zones. You're also right that homeowners can do things to protect from wildfire, like cleaning out brush and nearby trees.

In a nutshell though, it was foolish to build New Orleans the way it was built. Okay, I'll go along with that. What were those land developers thinking to build so far under sealevel?

A little hint: money.gif money.gif money.gif
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