Congress May Change The Bankruptcy Laws
As we all know, the Bankruptcy Laws were dramatically changed by Congress in October of 2005. Congress changed the Bankruptcy Laws due to an unfounded belief that debtors were taking advantage of the Bankruptcy Laws and Bankruptcy Attorneys were making it too easy for people to file bankruptcy. As we now know, Congress was wrong. The change in the Bankruptcy Laws did not change the way people spend their money. The change in the Bankruptcy Laws only made it more expensive to file for Bankruptcy. Now both houses of Congress are considering bills which would put more power into the hands of the Bankruptcy Judges. Under this new legislation, Bankruptcy Judges would be allowed to re-write mortgages on primary residences.
If this legislation is signed by President Bush, it would dramatically change the housing market as we know it. Right now, it is no secret that the Southwest Florida real estate market has hit the skids. I see people each and every day whose homes are worth much less than what they paid for them just a year or so ago. This new legislation would allow people to keep their homes and pay the actual amount that the home is worth, not the amount that is currently owed on the mortgage note. Plus, individuals would be able to get a grip on all of their other debt problems at the same time. It is a win win for the consumer. Unfortunately, it isn't such a great deal for the mortgage companies, who stand to lose quite a bit of money if the legislation is passed. Needless to say, the mortgage companies are lobbying quite hard against this piece of legislation. I will keep you updated on the future of this bill.
