The Bankruptcy Protection Act of 2005
Banking Lobby's Biggest Victory
Banking Lobby's Biggest Victory
Here we are heading into 2020 and we are still feeling the effects of the Bankruptcy Act of 2005. Our markets have not recovered to the market sales prices of 2007. Many homeowners still remain under water with their homes and are unable or unwilling to place their homes on the market. The result is the inventory shortage that this area is experiencing.
Housing markets crashed 20 to 30 percent or more in 2007 - 2009. In 2009 the banks sat on their money and did very few loans. Many homeowners who would like to sell are so far under water that they are forced to stay out of the market. The result is interesting. Resale homes that have been well main are on the market for less than a week. Homes priced under $200,000 often receive multiple offers within a few days.
The media wanted us to believe that the banks were corrupt and knowingly created very risky loans that they then sold to investors as solid loans. This is all true, but it was the 109th congress that toppled the market with this legislation. At one time I thought that our law makers were really smart people. The last three years has been an eye opener, Congress caused our economic collapse!
The Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005
Enacted April 20, 2005, the 109th Congress made several significant changes to the United States Bankruptcy Code. Referred to as the "New Bankruptcy Law", the Act of Congress attempts to, among other things, make it more difficult for some consumers to file bankruptcy under Chapter 7.
It was hailed at the time as the banking lobby's greatest all-time victory.
Some blame the mortgage industry for our national economic collapse, not me, give the blame to Barney Frank and this Consumer Protection act that raised debt ratios by doubling the credit card minimum payments , made it impossible for the lower income segment of our population to refinance their higher rate arms, made them late on credit cards and then mortgage payments which all ultimately led to massive foreclosures. In 2004 when I heard that Congress was passing this act it didn't take me long to figure out what was going to happen. How could our leaders have so little understanding or disregard for our nation's economy?
It was hailed at the time as the banking lobby's greatest all-time victory.
Some blame the mortgage industry for our national economic collapse, not me, give the blame to Barney Frank and this Consumer Protection act that raised debt ratios by doubling the credit card minimum payments , made it impossible for the lower income segment of our population to refinance their higher rate arms, made them late on credit cards and then mortgage payments which all ultimately led to massive foreclosures. In 2004 when I heard that Congress was passing this act it didn't take me long to figure out what was going to happen. How could our leaders have so little understanding or disregard for our nation's economy?
Summary of 2005 Protection Act
The many provisions beneficial to credit card companies were also a major target of the bill's opponents.
1. In particular, critics objected to the extension to eight years from six to the time before which debtors could liquidate their debts through bankruptcy.
2. Requirements that those who file for multiple bankruptcies pay previous credit card debt that would have been forgiven under the old law.
3. Provisions that prioritize the repayment of credit card debt over unpaid child support, forcing spouses owed alimony to fight with
credit card companies and other lenders for their unpaid support.
4. Critics argued that the legislation did nothing to curtail the predatory practices of credit card companies, such as exorbitant interest rates, rising and often hidden fees.
5. Allowing credit card companies the practice of targeting minors and the recently bankrupt for new cards.
6 . The bill's critics pointed out that these practices are themselves significant contributors to the growth of consumer bankruptcies.
7. And I will add foreclosures and the decline of the housing market, employment and the economy. Let's blame it on the Loan Officers, they have no voice to be able to set the record straight.
1. In particular, critics objected to the extension to eight years from six to the time before which debtors could liquidate their debts through bankruptcy.
2. Requirements that those who file for multiple bankruptcies pay previous credit card debt that would have been forgiven under the old law.
3. Provisions that prioritize the repayment of credit card debt over unpaid child support, forcing spouses owed alimony to fight with
credit card companies and other lenders for their unpaid support.
4. Critics argued that the legislation did nothing to curtail the predatory practices of credit card companies, such as exorbitant interest rates, rising and often hidden fees.
5. Allowing credit card companies the practice of targeting minors and the recently bankrupt for new cards.
6 . The bill's critics pointed out that these practices are themselves significant contributors to the growth of consumer bankruptcies.
7. And I will add foreclosures and the decline of the housing market, employment and the economy. Let's blame it on the Loan Officers, they have no voice to be able to set the record straight.