Bankruptcy is our issue on this blog. Bankruptcy is on the minds of our clients, and the Bankruptcy debate is now back in full swing with the recent announcement of Senator MBNA a/k/a Senator Joe Biden being selected as Senator Barack Obama’s Vice Presidential choice.
Even if we forget all the comments made by Senator Biden was he was running for president, like: I’m not running for Vice President, or If asked I will not accept the Vice President position, or even better, Senator Obama is not ready to lead this Country, I am a firm believer in actions speak louder than words. Senator Obama has stated on numerous occasions that he was against the Bankruptcy Bill when it was passed in 2005, yet his running mate was firmly for the Bankruptcy Bill.
Then in 2008, both Senators voted for an amendment to the Bankruptcy Code which would have allowed a modification of first mortgages on residential real estate. So, what will Joe Biden do next? And, how much influence has Senator Obama just purchased with his pick?
Let’s think back to the Senate debates on the bankruptcy bill in 2005. the first thing that comes to mind is the passion that Senator MBNA put into getting the bill passed. He was a staunch supporter of the bill. He was also very instrumental in getting many of the amendments stricken. Why was Senator MBNA a/k/a Joe Biden so interested in getting this bill passed? Did we really need it? Has it been a good thing for the people of the United States? Has it been a good bill for Visa, Mastercard, American Express, Capital One and Discover?
Now the issue is no longer whether to reform the bankruptcy code, but whether to amend it and help people who are losing their homes. For the last two years, Bankruptcy Attorneys and Bankruptcy Judges have been working their way through the new Bankruptcy Code to find a way to make it work. We have had decisions all over the board on various issues, and they keep coming in each and every day.
However, Senator Obama has stated emphatically on several occasions that, if elected, he would seek to amend the bankruptcy code to allow individuals to reduce the amount of debt on their homes to its actual value. This is a huge issue in the State of Florida because many of my clients have $100,000 in negative equity in their homes. But, if you think about it for a moment, this creates a direct conflict for the new Dynamic Duo.
Bankruptcy filings are going to exceed 1 million filings this year. Back in 2005, our fearless leaders thought that the requirements of the new bankruptcy code would make it harder and more expensive for people to file for bankruptcy, and therefore, less filings would occur. (At least that is what Visa, Mastercard, American Express, Capital One and Discover had hoped for) A tidal wave of filings was never supposed to happen again.
But, what our leaders didn’t anticipate was that their inefficiency in monitoring the powers that be on Wall Street, and their running of the economy, and their increasing budget deficits would somehow hurt the working man, thereby causing a recession (Of course there is more to it than this).
Now we face a troubled future. One that is very concerning to everyone I speak with and the big question is: If elected, will Obama – Biden keep their promises to amend the bankruptcy code? If so, will bankruptcy filings increase? If so, will Visa, Mastercard, American Express, Capital One and Discover be ticked off?
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