A question about the bankruptcy bill

[Kingofalldems]

Assuming people get the message and cut back on credit card use, my guess is this is going to hurt the overall economy since much of it is fueled by consumer spending. Am I wrong?

[Gump9005]

1. bill

Yep your wrong :) jk

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Media_Lies_Daily]

6. Nice to see a well-thought-out and well-documented reply.

[CountAllVotes]

3. I think you have a fair questioin

and you also point out a genuine concern. In my own case, I intend to spend as little as possible for at least the next 4 years.

This whole load stinks badly if you haven't noticed. This will and does affect everyone in America like it or not.

If you can't file bankruptcy any longer and you cannot pay the debt, then what? How does the underside of a freeway look to you?

If no one spends money, the economy will only worsen or collapse completely down the road. How long this might take I do not know.

These greedy SOBs shall reap what they have sown IMO, as so shall we unfortuantely. :( :grr:

:kick:

[Kingofalldems]

5. That's what I'm saying

I am no economist but it seems obvious to me. You are right, they will reap what they have sown and the nation will suffer.

[CountAllVotes]

16. yep it like chopping the tip off of the iceberg that eventually melts

I wish more people could see this reality coming. Everyone is telling me I am insane and to hang in there.

This is all way too freaky IMO. I wish I knew what to do besides write letter and send $ here and more $ there ad infinitum.

In the meantime why doesn't someone attempt to STOP this before it is too late. I am very angry with Sen. Bryd. Why the HELL did he vote for it I would like to know!?

:dem: :kick:

[TrustingDog]

11. those greedies reap off others misery...

always a buyer.

[punpirate]

4. I think that's a big assumption...

... and here's why (just my suppostion based on the numbers): In the bad old days, credit cards were limited to consumer goods. State by state, those regs were rewritten to allow credit cards to pay for nearly everything--utility bills, groceries, gas, etc.--even bail bonds.

Annual credit card balances are running at an annual rate of about $2.1 trillion. Consumer spending is roughly two-thirds of the entire economy, or about $7 trillion. A lot of that $2.1 trillion is going into continuing debt. As real wages continue to decline slightly, it means those balances are going to stay high, simply because many need credit to maintain their way of life. This situation is going to get worse as the job situation continues to deteriorate.

The other factor is, I think, that the people most likely to have the need to avail themselves of bankruptcy don't have a clue about what the changes will mean in their lives. Without that foreknowledge, they won't be cutting back on credit card use, and those that don't perceive any need to cut back will get surprised by the changes in the law.

So, in short, the people here may be well aware of the problems associated with unleashing the credit card industry, but the greatest portion of the public doesn't.

Now, if there's a contraction of credit card use, you're right--it will contract consumer spending somewhat. When 30% of consumer spending goes onto cards, it can't help but do so. But, and this is the big qualification--I don't think the public can afford to do so.

The real problem in this issue is that bankruptcies are going to go up--all the signs point to that. The largest percentage of those people will now be shunted into Ch. 13 payment plans which will suck out disposable income from their pockets and into the credit card companies. That money doesn't circulate in the community. It's just gone. With Ch. 7 plans, yes, those people can't use credit for some number of years, but what money they earn after a settlement goes to local goods and services. Under this new law, it disappears into the credit card companies' receipts. That will have a profound effect on general economic health.

Cheers.

[Kingofalldems]

7. So actually

It's a double whammy--people familiar with the new law will cut back and the uninformed will go bankrupt and have nothing left to spend.

[punpirate]

21. Yeah, unfortunately...

... I think that's it--lambs to the slaughter. One of the important aspects of the new law is that the debtor gets only a limited time for relief from debt during the filing period, and once a case is pushed into Ch. 13 and the grace period expires, the creditors start their demands again. Since the fees and interest rates aren't capped, the debtor gets into the system, and his debt keeps going up at the tail end of the system.

One of the side effects of all this is more manifestation of civil strife--an increase in crime, more people trying to torch their houses for the insurance, more people driving without car insurance, etc.

Safe to say that things ain't getting better with this legislation.

[jdj]

12. um, it's not even years anymore, and I think the companies

will seriously go after the base 7 people now.

My parents have done base 7 twice, once less than a year ago, and they have cards again now.

Luckily thanks to you people here on DU I heard about this bill and lit a firecracker under them and told them if they were going to file to get it done quick.

[Media_Lies_Daily]

19. Bingo! You gave them very good advice.

[Media_Lies_Daily]

14. Until this bill gets signed into law, I think we are going to see a....

...major stampede of folks declaring Chapter 7, and I intend to be first in line. The records for monthly bankruptcies should be absolutely shattered over the next several months.

I've tried to do the right thing since my business went down the tubes and repay my cards, but the medical bills have to be paid because we can no longer afford health insurance, the kids need new clothes, we need to pay for our utilities, we need to put gas in our paid-for economy cars, and we all need to eat.

I am tired of getting constant reminders in the mail that the percentage on my cards are continuing to rise, and I am tired of juggling my finances to pay the monthly bills.

I'm tuning in and dropping out, as we all used to say in the late '60s and early 70s. Our credit will take a major hit, but it's better than paying the kind of money we're paying to those credit card bloodsuckers.

As to all of the poor folks that will be faced with bankruptcies after this bill becomes law, may God have mercy on all of their souls. It is going to be a nightmare beyond our wildest visions.

[CountAllVotes]

20. so we shall return to my father's advice

He'd be 85 years old now and he did not believe in "charging" or buying things on "credit". It rarely happened so we had little but our family had NO DEBT.

I guess this is what it will be like again if you are lucky enough to have NO DEBT. What happens to all of these people living in these expensive houses if they get sick and cannot pay the medical bills?

They lose the house ... and then what.

I suppose the millionaires won't get hurt but anyone below the millionaire level and I mean multi-millionaire or billionaire won't notice.

These people are like of * and Kerry and most if not all of the rest of them. They have no worries. Bryd has his great job as a senator still. Life merrily rolls along while the rest of America goes along like a flock of lost geese not noticing the reality around them until they get a bill that cannot be paid and they have no money for rent nor a job.

I see sad and destitute times ahead.

Is it right to say goodbye America? My family like most Americans, came to these foreign lands from somewhere else to escape this kind of life in search of something called liberty, justice and freedom.

Being Americans we are known as a people to pack up and leave when necessary for this is what makes us Americans and this is why we inevitably survive somehow it seems to me. Where do we go next ... which land will be good for us we say perhaps. Or do we stay and fight and hope and try to rebuild what is left?

However ... parts of Germany do look good right now! :D

:kick:

[jdj]

8. what I predict will happen is dumb ass red staters will keep on

spending just like they keep on driving their SUV's and will have to file base 13 and then will get behind on their mortgages and get foreclosed on and have to rent for the rest of their lives or move in with Mom and Dad, who maybe if they are lucky will teach them the old ways to survive before the age of consumerism dawned in the 1950s.

I'm serious. I think people will have to lose their houses and cars. I don't see the presumed 51% getting a clue.

[Fescue4u]

13. Nor the other 49%

I don't think that bankruptcy and financial failure is a partisian thing.

As I said above, virtually no ones thinks they'll be in bk in a 4 years, yet millions get there anyway.

[Media_Lies_Daily]

17. What does living in a red state or blue state......

...have to do with this issue? There are people like you've described in every state in the union.

Ever think that Mom and Dad may have to move in with the kids when they lose their houses and cars?

[jdj]

23. because people in W. states who voted for him have their heads up their

asses and think he will protect them from all evil. We don't trust the SOB and are more likely to alter our behavior. They won't. I'm in a red state, by the way.

[aint_no_life_nowhere]

9. I've been wondering about the same thing - whether productivity would drop

According to the statistics that I have seen, about half of all credit card debt is incurred not through normal consumer spending, but instead as a result of catastrophic events such as grave illness and divorce.

But regarding the other 50% of so-called consumer debt, as good American consumers who are barraged all day and night by commercials brainwashing us to buy everything in sight, we have often responded by in fact trying to buy everything in sight. The brainingwashing apparently works. We are told in commercials not to leave home without our credit card and that we should feel naked or incomplete without one. Those who have piled up a great deal of consumer debt, who have chosen not to file for bankruptcy have often had to work two jobs, or to work overtime. I wonder what would happen if those individuals began cutting back on spending, didn't purchase that new car, didn't take that vacation, resigned from their second jobs, began devoting their time to something other than consumerism and economic upward mobility, encouraged their spouse or significant other not to work and not to pursue the two paycheck rat race, and instead cut back and enjoyed a smaller life, of meditating, reading, taking up painting, or music. It seems to me that it would affect commercial productivity. I would be interested to know whether a significant portion of American productivity is in response to the fact that many are clinging to the edge of the cliff of massive debt, and if people began ignoring the marketing and brainwashing all around us, what effect it would have on our economy. I wonder if our corporate masters really want us to stop overextending ourselves and become so-called "responsible" citizens.

[Fescue4u]

10. No. it won't

At least not immediately.

A very very small minority of folks go spending with the thought that they will just file BK on it.

Folks that end up in BK never thought it would happen to them.

Since nobody thinks it will happen to them, few will change their habits.

I suppose in about 4 years, when you have throngs of people fully saturated in debt, and unable to get a fresh start..then they'll stop spending..but it'll be very gradual.

[lovuian]

15. I think I found a loophole Age

If I'm a 76 year old guy and decide to charge up all my credit cards

and then declare bankruptcy because I have cancer

how much are those credit companies going to get from this old man

a stipend from his social security check that they are taking!!!

and yet a young person thats the trick they can have them pay for years and years and years

[EC]

18. That's my guess too,

I think many people including myself, will cut up their credit cards and only buy neccessities. Impulse shopping will die. But I've always said the Republicans and Big Business have always been real good at cutting their own throats...

[CountAllVotes]

22. I intend to use mine still

but only to my benefit. I've been forced to cut spending because everything is so expensive now that I am limited.

And that means one credit card. I get 1.25% cashback on it every month and I always pay if off so I make money of THEM. I use it for recurring bills that are payable via credit card. So I make a few $ now and then. Otherwise, to hell with them. They suck.



:kick: