Compassionate Conservatism strikes again.

[flamin lib]

Judge takes Congress to task in bankruptcy case
Legal world abuzz about tirade calling act inane, confusing.
By Robert Elder
AUSTIN AMERICAN-STATESMAN STAFF
Monday, February 06, 2006

FREDERICKSBURG Alfonso Sosa, a house painter here who made about $20,000 last year, filed for bankruptcy the morning of Dec. 6, hoping to avoid the foreclosure on his family's mobile home scheduled for later that day. Judge Frank Monroe of Austin rejected the case 16 days later with a bang.

In his ruling, Monroe said the new federal bankruptcy law is full of traps for consumers, calling some of its provisions "inane," "absurd" and incomprehensible to "any rational human being."

He stopped just short of accusing Congress of being bought and paid for, dryly noting, "Apparently, it is not the individual consumers of this country that make the donations to the members of Congress that allow them to be elected and re-elected and re-elected and re-elected."

Monroe isn't the first judge to tee off on the new bankruptcy law, which was a priority of President Bush and backed heavily by the credit industry.
Congress passed the new law in April on largely partisan lines.
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You really must read the whole article. It is unbelievable. http://www.statesman.com/news/content/news/stories/local/02/5bankrupt.html

Better yet, read the Judge’s ruling—like Dubya, the Judge is a “plane spoken man.” http://alt.coxnewsweb.com/statesman/metro/020506_bankrupt.pdf

I spoke with a friend in the financial planning profession, someone very knowledgeable about the new Bankruptcy Act. He tells me that it is working exactly as planned—by the credit industry. In his own words, “If it truly becomes impossible to stay in a plan then forcing people out of Chapter 7 into Chapter 13 can have no purpose other than making sure the creditors have as much ability to harass debtors and take assets as possible.” In many states that means once the Chapter 13 plan fails the creditors can garnish wages and it’s first come first served. Does the term “feeding frenzy” come to mind?

This law was written by the Lobbyists representing the banking industry and presented to Congress in finished form for passage. The same thing happened with Dick Cheney’s energy task force. I thought we elected legislators to write legislation but like all the manufacturing jobs it seems to have been out sourced. This is the worst kind of influence peddling and is a perfect example of absolute power corrupting absolutely.

The law is full of Catch 22s. For instance, in the case of Alfonso Sosa, his petition was denied because he was required to take a few hours of credit counseling before filing. He couldn’t have known that without an attorney. Tell me, where is a fellow making $20,000 a year who is three payments behind on his home and truck going to come up with a couple of grand to hire an attorney? A couple of hours counseling? This provision isn’t designed to educate the debtor; it is there for the sole purpose of excluding those who can’t afford an attorney and giving creditors full access to their assets without protection of law.

How about this: If a debtor has an asset protected by a secured loan the old law allowed the Trustee to pay the amount needed to protect the lender’s equity out of the plan. Now the debtor has to pay it directly. If all of the disposable income is either in the plan or in the approved budget, where is the extra money to protect the secured lender supposed to come from? It forces the lender to foreclose the asset even if it is a secured loan.

The fellow I mentioned earlier put it this way, “If enough statutes like this one are passed eventually the rich will all live behind walls with armed guards and the rest of us will live brutish lives. The rich are going to be targets of kidnapping, death threats and robbery just like in Mexico. The economic system is being converted into a system to take as much money as possible from the poor and middle class and deprive us of any economic rights to protest violations of law by industry. Why else deprive the populace of legal rights?”