As bankruptcies surge, Congress ponders change in law

[babylonsister]

As bankruptcies surge, Congress ponders change in law
By Rob Hotakainen | McClatchy Newspapers

* Posted on Monday, January 7, 2008



WASHINGTON — In 2005, Congress passed a new law aimed at making it harder for people to file for bankruptcy and walk away from their debts.

With the tougher requirements, the number of bankruptcies declined in 2006 but surged by nearly 40 percent in 2007, according to statistics released Thursday. And experts predict the numbers will go higher this year.

The issue is gaining plenty of attention on Capitol Hill, where leading Democrats are proposing to roll back the landmark bankruptcy law. As the number of foreclosures rise, backers of an overhaul say it's needed to prevent more Americans from losing their homes.

"You ought to never lose your home in a bankruptcy proceeding," Connecticut Democratic Sen. Chris Dodd said during a presidential debate in Iowa last month.

Democrats want to help constituents such as Nettie McGee, who bought an $80,000 house — her first — in Chicago in 1999, when she was 65 years old.

Living on Social Security, McGee said she had to refinance her home to pay $5,000 in back taxes to avoid a foreclosure. She said she wasn't aware that her house payment would rise from $706 to $912 per month, beyond what she could afford on her fixed income.

"I thought I signed a fixed-rate mortgage," she told the Senate Judiciary Committee during a hearing last month. "I had no idea my payments would jump almost 25 percent. My interest rate went from 7.87 percent to 10.87 percent, and it could eventually go as high as 13.87 percent. I don't know how I'll make my payments now. They are higher than my Social Security check."

more...

http://www.mcclatchydc.com/homepage/story/24275.html

[Mr_Jefferson_24]

1. Oh my, too many ordinary working stiffs whose...

...livlihoods we've been systematically destroying for the last several decades all seem to be drowning at the same time, and trying desperately to cling to the same flotation device. Hmm...what to do, what to do...EUREKA!!! I've got it!!! We'll pass legislation that takes away the flotation device...Hooray for us, we solved another one!!!

What would the people ever do without us legislators -- God, they're lucky to have us.



----------------------------Um...help?------------------------------

[KharmaTrain]

2. Thought I Had A Fixed Rate Mortage?

The person didn't know? I find that awfully hard to believe. Maybe it's because I haven't applied for a mortgage in 15 years, but I sure as hell knew the rate and if it was a Fixed, ARM or other type of mortgage. This sounds more like a seedy broker to me. Also, most mortgages I know of usually include the property taxes...at least mine do.

$80Gs doesn't buy much of a house...even in bad areas of Chicago. I suspect there's more to this story than blaming the big banks.

[Demeter]

3. I Could Become Physically Ill

After all the screaming, they come to our point of view on

1) Iraq
2) Bankruptcy reforms
3) George Bush
4) Electronic voting
5) Wolfowitz

and maybe even before it's too late: Iran!

Who says you can't teach a dead Congress new tricks? Or maybe it's seeing how many have been carted off in chains that's trimming their sails?