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View Diary: Protesting Foreclosure (27 comments)

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  •  Some of this debt can be discharged (4+ / 0-)
    Recommended by:
    martini, Rizzo, KenBee, evergreen2

    in bankruptcy. That works with medical bills. However, as the level of consumer debt was steadily mounting up, congress was passing laws to restrict to access of consumers to the bankruptcy courts. Most notebally student loans and mortgage debt were excluded.

    •  Exactly. By changing bankruptcy (4+ / 0-)
      Recommended by:
      Rizzo, Richard Lyon, KenBee, evergreen2

      rules regarding student loan debt and mortgage debt while also making going into bankruptcy much harder , the effect in a practical sense was to give a huge bargaining advantage to the debt holder.

      In the case of credit card debt, what one can do, even if someone does not quality for bankruptcy is to threaten bankruptcy, and this is enough to get banks to negotiate a settlement that's 10 to 25 percent of the debt rather than the entire amount.

      There are simply more options to negotiate if the law favors consumers, and if they favor banks, there are just not any. The real question then becomes on what side should the government be? Not personal responsibility because at the end of the day they are going to be on one side or other in terms of what the two parties will negotiate. In effect by closing off these paths the government is siding with creditors over debtors no matter how they try to moralize it. They are telling the banks that their risk taking is safe while act as a guarantor to force the risk onto the debt holder.

    •  Many people (2+ / 0-)
      Recommended by:
      Richard Lyon, evergreen2

      can't afford bankruptcy anymore (3-4K) , or some make too much money for it to work for them, but not enough to pay the debts they have. Student loans being forever is a huge problem for people.

      Overall, the consumer credit markets have run amok in a hundred different ways in the US (and worldwide too--the Polish for instance are taking out 100 year mortgages to 'own' a soviet era apartment in Warsaw)

      Everyone would better off incorporating themselves at age 18, then running absolutely everything through that 'corporate person' .

      If trouble develops - close that corporation and start another.

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