Biden Backs Bankruptcy Reform
By Douglas Jacobs, California Bankruptcy Attorney on Oct 2, 2008 in Bankruptcy Practice and Procedure, Benefits of Bankruptcy
Economics was a major topic of the vice-presidential debate held on October 2, 2008. Both Governor Palin and Senator Biden spoke about the need for change and economic relief for the middle class. True to their party’s politics, each candidate had their own spin on how to accomplish such necessary relief. Truth be told however, much of what was said was more in the nature of campaign rhetoric and “sound bites” than specific plans to ease the mortgage crisis and the country’s economic woes.
Although Governor Palin didn’t mention bankruptcy reform, Senator Biden faced the issue head on, saying that he and Senator Obama would support a change to the law that would allow a bankruptcy judge to reduce, not only the interest rate paid on a mortgage, but the amount of principal as well. He correctly noted that such a change would keep more people in their homes and strengthen the mortgage companies as well by reducing foreclosures.
This is an idea that has been promoted by NACBA (the National Association of Consumer Bankruptcy Attorneys) and most consumer advocates for years. It would protect millions of people from foreclosure by creating a way, with proper oversight, to restructure what they are paying on their home. Let’s hope that whoever wins in November, such a change in the law will come to pass.
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