Bankruptcy

The bitter truth is more Americans consider bankruptcy every day. One of the main culprits, are the banks. The banks and credit card companies have raised interest rates through the roof as our law makers sit idly by watching with little or no concern for the welfare of the nation. What should we do to correct these issues?

1) Congress must pass legislation regulating the maximum interest rate chargeable (usury laws are state laws that specify the maximum legal interest rate at which loans can be made. Congress has opted not to regulate interest rates on purely private transactions, although it arguably has the power to do so under the interstate commerce clause of Article I of the Constitution. Congress has opted to put a federal criminal limit on interest rates by the RICO definitions of "unlawful debt" which make it a federal felony to lend money at an interest rate more than two times the local state usury rate and then try to collect that "unlawful debt". It is a federal offense to use violence or threats to collect usurious interest. Such activity is referred to as loan sharking, although that term is also applied to non-coercive usurious lending, or even to the practice of making consumer loans without a license in jurisdictions that require licenses). I would purpose that an interest rate greater than 12% (1% per month) would be a reasonable rate.

2) There should be 3 levels of Bankruptcy.

A) when the Bankruptcy Judge deems that debts are spiraling out of control, yet the person or persons filing are by their own actions responsible for their condition (i.e. Not as under natural disasters such as earthquakes, floods, or other regional disasters also known as an act of God, or personal disaster such as catastrophic illness, criminal victimization of person or family member or any other situation deemed by the judge as pertaining to the issue of debts). When so deemed all interest rates are suspended and payments made only upon the principle. During the time frame set out by the judge, payments will be constructed to pay off those debts by the end of that said time (i.e. if the debtor owes $12000 in outstanding debts and the judge rules the bankruptcy duration as one year the debtor shall pay to the court $1000 per month; exceptions for payoffs may be imposed by the judge to include mortgages). Level A, bankruptcies may be universally applied to areas affected as National Disaster Areas so designated by the President, without the payoff clause enacted. Thus minimum payments must be made; again all payments during this time would be interest free. Under Level A bankruptcies new debts may be incurred, however, these debts will be exempt from the no interest clause with the exception of new medical debts or recovery loans (loans made to recover from natural disasters). Level A bankruptcies may not be carried on the debtor’s credit report past the payoff date.

B) When the Bankruptcy Judge deems that debts are spiraling out of control, and the person or persons are responsible for their condition. The Judge will review the debts, and be charged with determining whether such debts may be released or restructured. Any debts which are released and having assets will at the discretion of the Judge be dissolved by surrender of said assets to the creditor. The Judge will then assign a recovery fee to be collected by the court and disbursed to creditors. The recovery fee shall be made over a period of time not to exceed 7 years and no less than 1 year, where the debtor shall make payments according to the terms put down by the Judge. Under Level B Bankruptcies, no new debts may be incurred without appeal to the court until said time that the recovery fee is satisfied. Any windfall assets received by the debtor must be reported to the court and assessed by the judge, pending determination of the new conditions which may at the Judge’s discretion give grounds to restructuring or dissolution. Level B bankruptcies may only remain on the debtor’s credit report for no more than 3 years past the recovery fee payoff.

C) When the Judge determines that the situation is beyond control and the condition is his or her responsibility. He may dissolve all debts and order collection of all assets (exemptions of a primary home valued no greater than the National Median price and a single vehicle also valued no greater than the National Median price). At said time, this Bankruptcy shall bear full impact and may remain on the debtor’s credit report for a full 10 years. Any windfall assets received within the 10 year period may be confiscated by the court to be disbursed to creditors...

3) Unlawful or unfair collection of debt shall be addressed by the courts. In these proceedings, should the court find fault with the collection agency or the creditor, said debts may be forgiven, reduced, or restructured (assigned a lower interest rate).