New Bankruptcy Law ? Targeting the Wrong People? -

Home
>
Debt Relief
>
New Bankruptcy Law ? Targeting the Wrong People?

New Bankruptcy Law ? Targeting the Wrong People?

Last April, President Bush enthusiastically signed into law the oddly-named Bankruptcy Abuse and Consumer Protection Act. This bill, representing the biggest overhaul of bankruptcy law in twenty-five years, was written in order to discourage "bankruptcy of convenience." Proponents of the bill, which included the credit card industry, say that the bill is necessary in order to stop an avalanche of bankruptcy filings by drug users and compulsive shoppers and gamblers. The law makes it harder to have debts wiped away, requires credit counseling for those considering bankruptcy, and holds attorneys responsible for paperwork errors by their clients in bankruptcy cases. The net result will probably be chaos, as fewer attorneys will handle bankruptcy cases, credit counselors will raise their fees, and more consumers with problem debt will be clueless as to what they should do next. Adding to the confusion are some new statistics that suggest that a large number of bankruptcies that are thought to be personal are actually business bankruptcies. As a result, the new law may be unfairly targeting consumers for punishment when they are not actually the biggest part of the problem. Worse, it could be harming small businesses.

Studies suggest that the number of business bankruptcies may actually be up to ten times higher than previously reported. Many small businesses that fail and file for bankruptcy do so under guidelines that technically classify them as personal bankruptcies. The new law doesn't account for this, however, and treats such bankruptcy filers no differently than those who file because they can't stop shopping. It benefits no one to force a small store owner to undergo mandatory credit counseling when their business may have failed due to other reasons, such as having a big-box retailer more in next door. Even if that is the case, the law will require the bankrupt business owner to attend counseling in order to learn about managing personal and household budgets. This wastes the time of both the business owner and the credit-counseling agency and denies valuable counseling resources to those people who may really need it.

In time, Congress may amend this legislation if certain aspects of it do not work as intended. In the meantime, small business owners and those with personal debt problems will be inconvenienced, credit counseling agencies will be overworked, and no one will be any better off for it.

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and HomeEquityHelp.com, a site devoted to information regarding home equity loans.

In The News:

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.chinadaily.com.cn/china/2008-10/11/content_7096731.htmcid=1256028374ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNFIgScrefr0f_O2eOnwI6KgB3PCEQimg src=http://news.google.com/news?imgefp=DqexUCPCtEcJimgurl=www.chinadaily.com.cn/china/images/attachement/jpg/site1/20081011/0013729e42ea0a5a388804.jpg width=80 height=60 alt= border=1brfont size=-2China Daily/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://online.wsj.com/article/SB122384276370026777.html%3Fmod%3Dgooglenews_wsjcid=1256028374ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNEF0Lth2v5ZQLSfpEKDMDWnaeFNLwIt#39;s Wait and See for Bond Traders/abrfont size=-1font color=#6f6f6fWall Street Journalnbsp;-/font nobr23 hours ago/nobr/fontbrfont size=-1quot;Logic, albeit logic in an irrational market, points to system brelief/b on its way,quot; said David Ader, head of government bond strategy at RBS Greenwich b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.portfolio.com/views/blogs/market-movers/2008/10/12/lehman-cds-datapoint-of-the-daycid=1256028374ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNFjp3Lq5MsK6t6l-WoG88QRaCwkIQLehman CDS Datapoint of the Day/a font size=-1 color=#6f6f6fnobrConde Nast Portfolio/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://seekingalpha.com/article/99527-settlement-auction-for-lehman-cds-surprises-behindcid=1256028374ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNG54eBpwDoq1Yl_YL29F_3hcVM7AwSettlement Auction for Lehman CDS: Surprises Behind/a font size=-1 color=#6f6f6fnobrSeeking Alpha/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.moneyweek.com/news-and-charts/economics/all-you-need-to-know-about-credit-default-swaps-13792.aspxcid=1256028374ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGBkuIGJRdmGTTE_S2wCPaSivWGPwAll you need to know about credit default swaps/a font size=-1 color=#6f6f6fnobrMoneyWeek (subscription)/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256028374hl=ennobrall 268 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://voanews.com/english/2008-10-04-voa10.cfmcid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNEpaCiQms8F0um0d-Q_NgIeLUDgeQimg src=http://news.google.com/news?imgefp=7dmHhGqpryoJimgurl=voanews.com/english/images/ap_us_bush_175_03Oct08.jpg width=80 height=80 alt= border=1brfont size=-2Voice of America/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.globalresearch.ca/index.php%3Fcontext%3Dva%26aid%3D10541cid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNF9ehi5MRXlIw-dM-mb7-Rl9YsiDACan Congress Bail Out of the Bailout?/abrfont size=-1font color=#6f6f6fCenter for Research on Globalization,nbsp;Canadanbsp;-/font nobr23 hours ago/nobr/fontbrfont size=-1Will voters see the asymmetry in Congress#39;s failure to offer bdebt relief/b for homeowners as real estate prices plunge below the mortgages that are owed? b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.youtube.com/watch%3Fv%3DsHJ-Sylxzsocid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNFdXWoqrevQ4avwXsRpeBXuS9xqXwVideo: Bush: #39;We Must Work Collaborately to End Crisis#39;/a font size=-1 color=#6f6f6fnobrAssociatedPress/nobr/fontobject width=448 height=356param name=movie value=http://www.youtube.com/v/sHJ-Sylxzso/paramparam name=wmode value=transparent/paramembed src=http://www.youtube.com/v/sHJ-Sylxzsotype=application/x-shockwave-flashwmode=transparentwidth=448height=356/embed/objectbr/fontfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.npr.org/templates/story/story.php%3FstoryId%3D95624944cid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNE6mrYUK7FhAkxQAs0DuB7MWwWfZgPaulson OKs Bank Stock Purchase Plan/a font size=-1 color=#6f6f6fnobrNPR/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://online.barrons.com/article/SB122366669316023783.html%3Fmod%3Dgooglenews_barronscid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNHc-OTqe6gbIjvOxszY_v3o_fAjagAre Munis Next on the Menu for Bailouts?/a font size=-1 color=#6f6f6fnobrBarron's/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.forbes.com/reuters/feeds/reuters/2008/10/13/2008-10-13T183102Z_01_N13467632_RTRIDST_0_FINANCIAL-USA-WRAPUP-2.htmlcid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNEKnfTiU2lAwQkBCs77JrMCTsVDSQnobrForbes/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://online.wsj.com/article/SB122359597433321245.html%3Fmod%3Dgooglenews_wsjcid=1255629985ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNHOXOQwU9DIfsrZNoL2szKJfU6i8wnobrWall Street Journal/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1255629985hl=ennobrall 3,161 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://afp.google.com/article/ALeqM5jdAb6vG1ij2Kvt00p2ZwJtSVfxmwcid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGnpgI7VI9NF9ZrmMJ1UDStGUjhswimg src=http://news.google.com/news?imgefp=njBADo-p0RoJimgurl=afp.google.com/media/ALeqM5iLl_GMeSkw_d8qUN5_guFjP4AS7A width=80 height=53 alt= border=1brfont size=-2AFP/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3Dah0.VPPWSM4c%26refer%3Dhomecid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGMxXJsIo-jEDcpO4k_sY8IbMYf2gPaulson Speeds Consideration of Guarantees for US Bank bDebt/b/abrfont size=-1font color=#6f6f6fBloombergnbsp;-/font nobr22 hours ago/nobr/fontbrfont size=-1Treasury Assistant Secretary Neel Kashkari, the aide charged with running the $700 billion Troubled Asset bRelief/b Program, is scheduled to give an update of b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.youtube.com/watch%3Fv%3DqaJ456CNCy0cid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNFnax-ikVs1z2H-Ye2Dqm91YGUucAVideo: Paulson Says Global Markets Remain Strained/a font size=-1 color=#6f6f6fnobrAssociatedPress/nobr/fontobject width=448 height=356param name=movie value=http://www.youtube.com/v/qaJ456CNCy0/paramparam name=wmode value=transparent/paramembed src=http://www.youtube.com/v/qaJ456CNCy0type=application/x-shockwave-flashwmode=transparentwidth=448height=356/embed/objectbr/fontfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bizjournals.com/baltimore/stories/2008/10/13/daily10.htmlcid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGaKF3y1ZmGmGQZ4fIWID8EaMhMYgTreasury Department to name bailout manager Tuesday/a font size=-1 color=#6f6f6fnobrBizjournals.com/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4922981.ececid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGpg8BpsgGcuqGDen_g9IyCMTJ1GQLehman Brothers demise triggers huge default/a font size=-1 color=#6f6f6fnobrTimes Online/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3DaygkzbMlBVNU%26refer%3Dhomecid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNGC8oDUnbvefpHp6xEQt2D-R7lHeAnobrBloomberg/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bloomberg.com/apps/news%3Fpid%3D20601085%26sid%3Da6cw22uigFhc%26refer%3Deuropecid=1256952153ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNHkMxfNS_9XVs90QM6Y--mHG2pSDAnobrBloomberg/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256952153hl=ennobrall 1,578 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.punchng.com/Articl.aspx%3Ftheartic%3DArt200810022181839cid=1253130373ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNHIDe6R-yOX79yBenrek-Pu4rIS2gHow FG spent N308.3bn bdebt relief/b funds/abrfont size=-1font color=#6f6f6fThe Punch,nbsp;Nigerianbsp;-/font nobrOct 1, 2008/nobr/fontbrfont size=-1By John Ameh, Abuja Nigeria realised and saved an estimated N308.3 bn from its bdebt relief/b efforts after the Paris Club wiped off its $19.3bn bdebt/b in June b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.thisdayonline.com/nview.php%3Fid%3D124091cid=1253130373ei=AhH0SO_yHqXg6gOM4YWXDQusg=AFQjCNFTorCv2dLXGcapnf4A2VihT255fQFG Spends N2.4 bn bDebt Relief/b Fund on Education â€“Wâ€™Bank/a font size=-1 color=#6f6f6fnobrTHISDAY/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1253130373hl=ennobrall 6 news articles/nobr/a/font/div/font/td/tr/table

debt relief - Google News