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chaloobi
SFN Regular
1620 Posts |
 Posted - 03/30/2009 : 13:00:26 [Permalink]
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Originally posted by Machi4velli
Anyway, we already have mechanisms to relieve debt. That's why we have chapter 13 bankruptcy. It allows people to keep property, avoid foreclosure if they own homes, and restructure payment plans on debt. Of course it is not a fun process, but getting into debt is not a good thing.
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I'm not familiar with the specific rules of Chapter 13 Bankruptcy, but would you say it is inconsistent with this statement:
| I believe the government's role is not to fix every problem someone gets into, but it should help people get out of problems they can't get out of on their own. |
Here are the rules in case anyone's interested. This only works if you have a job, btw.
http://en.wikipedia.org/wiki/Chapter_13,_Title_11,_United_States_Code
Disadvantages
The disadvantage of filing for personal bankruptcy is that a record of this stays on the individual's credit report for up to 10 years (e.g., Chapter 7 is 10 years, Chapter 13 is 7 years). During the pendency of a Chapter 13 case the debtor is not permitted to obtain additional credit without the permission of the bankruptcy court. Moreover, creditors may not be willing to risk lending money to such an individual. However, this disadvantage is not unique to Chapter 13; it may also apply to individuals currently in a Chapter 11 case, Chapter 12 case or those who are in or have recently been in a Chapter 7 case.
Advantages
The advantages of Chapter 13 over Chapter 7 include: the ability to stop foreclosures although a foreclosure would be reinstated upon completion of the bankruptcy; to achieve a super discharge of debts of kinds not dischargeable under Chapter 7; to value collateral; to bifurcate the security interest of creditors in certain property that creditors are either charging too much interest for, or are over-secured, or both, and leading to a cram down modification of the debt; to prevent collection activities against non-filing co-signers (co-debtors) during the life of the case.
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-Chaloobi
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| Edited by - chaloobi on 03/30/2009 13:05:41 |
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Machi4velli
SFN Regular
USA
854 Posts |
Posted - 03/30/2009 : 13:28:28 [Permalink]
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| There is Chapter 7 if you don't have a job, which is more painful. I do not think it is inconsistent with your statement, bankruptcy is a way to relieve debt if a person cannot pay alone. I would not necessarily be opposed to arguments to reform bankruptcy in some way, but I am not sure we should treat student loan debt any differently than we treat other types of debt. |
"Truth does not change because it is, or is not, believed by a majority of the people."
-Giordano Bruno
"The greatest enemy of knowledge is not ignorance, but the illusion of knowledge."
-Stephen Hawking
"Seeking what is true is not seeking what is desirable"
-Albert Camus |
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Why do Republicans hate the poor?
