|
Highlights of the
bankruptcy reform bill
By Holden
Lewis • Bankrate.com
The bankruptcy reform bill:
• Spells out what is a reasonable amount
to pay for food, clothing, transportation and housing, and requires
the debtor to live within those guidelines unless there is a good
reason not to;
• Makes it harder to shield assets by
moving to Texas or Florida (or another state with a high homestead
exemption) and buying an expensive house;
• Forces the debtor to pay the full cost
of an auto loan or lose the vehicle to repossession, even if the
vehicle isn't worth the outstanding balance on the loan;
• Requires debtors to complete courses
in personal financial management before their debts are discharged
in bankruptcy;
• Raises the priority of child-support
and alimony payments;
• Places a $1 million cap on the amount
in Roth and regular Individual Retirement Accounts that can be shielded
from creditors;
• Protects money that has been put in
education IRAs;
• Requires debtors to pay all charges
made to credit cards in the three months before filing for bankruptcy;
• Makes it easier for landlords to evict
bankrupt tenants who are behind on their rent;
• Lets creditors ask the court to dissolve
the bankruptcy plan if a debtor is late in filing paperwork, such
as copies of paycheck stubs and tax returns;
• Requires bank regulators to study whether
credit card companies are offering credit indiscriminately, without
regard to whether consumers can repay their debt, and whether the
resulting debt is contributing to bankruptcies;
• Requires credit card issuers to disclose
how long it will take to pay off a balance if you pay just the minimum
every month, and prohibits the issuer from closing your account
just because you pay off the balance every month and don't pay interest.
• Instructs the Federal Reserve to find
out whether people are going bankrupt because of credit card debt
amassed in college.
|
