Bankruptcy Reform, Looking Back
By Kurt O'Keefe, Attorney at Law on Jul 29, 2008 in Featured
Bankruptcy laws were massively changed effective October 17, 2005.
One of the selling points, was that too many people were filing, and this cost the rest of us $400 per year, because our cost of borrowing was higher to cover the losses from all those deadbeats filing Chapter 7.
Well, the credit card company losses were decreased, fewer people filing, fewer credit card balances discharged in bankruptcy.
Did you get your $400 check?
An academic study of the effects of the new law concludes the cost of credit to consumers actually increased.
Not only that, another study says the bankruptcy reforms have worsened the foreclosure crisis.
All in all, a bad deal for the average American.
We keep beating on the drum, the best way to address the foreclosure crisis is a one sentence change in Chapter 13 bankruptcy law, to allow the Court to re-write mortgages on residences.
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