The following is an opinion article from the LAtimes:

http://www.latimes.com/news/opinion/commentary/la-oe-scheer15mar15,0,1004106.column?coll=la-news-comment-opinions

This article addresses a recent bill that is trying to make it much more difficult to file a bankruptcy here in the United states. Why is there a need for this bill? Because big business is upset that some people are "getting away" with not paying their bills by filing bankruptcy. Several relevant points are discussed in the above article but I would like to address one that isn't.
When a big company screws up and hurts people or makes financial mistakes that seal it's fate, one of the best known tactics is to declare bankruptcy. While this is still usually the end for a company, it can allow them time to maneuver and figure out what to do with all their funds rather than paying them out to the plaintiffs in a law suit, other companies, etc.
The fact that these companies use the same tactic that they are decrying is evidence of how important federal protection of the consumer with fair trade and bankruptcy laws is.
If we allow big business to team up with the federal government to harass citizens whom have made financial mistakes, the only people that will suffer will be the middle and lower classes, while the rich get richer and politicians bath in ill gotten gains.

The most controversial part of the overhaul is the needs test where those whose income exceeds their state's median income, and can pay at least $100.00 per month over a 5 year period, would be forced in to a Chapter 13 repayment plan. Prior to filing, the law requires consumers to enroll in a credit counseling or debt consolidation repayment plan for 6 months in an effort to get their finances in order.

For more info:

http://www.debt-consolidation-alliance.com/bankruptcy-act.htm

http://www.debt-consolidation-alliance.com

Also, 6 months prior to filing bankruptcy, you have to go to a credit counseling agency.

http://www.debt-loans.com/debt-consolodation-loans.htm
http://www.my-credit.net
http://www.credit-relief.com

Generally I've found that whatever the editorial page of a newspaper like the LA Times says, believe the opposite, vote for the other guy, etc. and you will always be closer to being more informed and/or making the better decision.

I had a now-ex friend who had run up massive debts and then declared bankruptcy to get out of them, knowing full well that was how she would get out. And while I am extraordinarily unsympathetic to credit card companies, unfortunately, all of us pay for what debtors do because businesses don't eat costs - they simply pass them on to the rest of us.

Here's some more info on the revision act:

With the stroke of a pen, the Bankruptcy Abuse Prevention and Consumer Act was signed into law enacting measures that will make it more difficult for consumers to get out of debt by filing personal bankruptcy. The first major overhaul in 27 years will become effective in 180 days.

S. 256, the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," which makes several changes to the Bankruptcy Code, including establishing a means test for chapter 7 bankruptcy, raising the priority for payments of domestic support obligations, placing limits on the homestead exemption, and requiring credit counseling prior to filing for bankruptcy; and enhances credit card company disclosure requirements.

The most controversial part of the overhaul is the needs test where those whose income exceeds their state's median income, and can pay at least $100.00 per month over a 5 year period, would be forced in to a Chapter 13 repayment plan. Prior to filing, the law requires consumers to enroll in a credit counseling or debt consolidation repayment plan for 6 months in an effort to get their finances in order.

The law is expected to affect between 30,000 and 210,000 people who file for chapter 7 bankruptcy protection and force them into a chapter 13 repayment plan.

Those people have six months until the law takes effect to escape the tougher guidelines. Bankruptcy lawyers have said they anticipate a rush to the courthouse.

Under the current system, a federal bankruptcy judge determines whether individuals must repay some or all of their debt.

Under the new law, those with insufficient assets or income could still file a Chapter 7 bankruptcy, which, if approved by a judge, erases debts entirely after certain assets are forfeited.

Additionally, this law places domestic support obligations such as child support and alimony amongst the first priority claim category of non-dischargeable debts on a debtor filing for bankruptcy. However, claims to back child support and alimony would be on equal footing with the claims of credit-card companies.

Additionally, states that have unlimited homestead exemptions (Florida, Iowa, Kansas, South Dakota and Texas) and allow anyone to file and shelter their primary residence regardless of value, will now have limits of up to $125,000.00 if the petitioner bought the residence less than three years and four months before filing. Homes purchased before that cut-off would still qualify for the full exemption allowed in that state.

New personal bankruptcy filings went from 1,613,097 in the year ending June 30, 2003, to 1,599,986 in the year ending last June 30, counter to that upward trend of recent years.

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