Bankruptcy Secrets
The Rich are (as always) Protected
Don't worry about the rich! This new bankruptcy law was carefully crafted to give the appearance of being fair to people of all classes but in reality it's not. It favors the rich as does all the legislation that's coming out of Washington these days.
The rich will still claim their residence in Texas and Florida which have unlimited homestead exemptions if they observe the new residency restrictions. They will sink all their remaining funds in improvements to their homes while making very sure to maintain their drivers licenses in those most favorable states.
For example, Ken Lay the architect of the Enron disaster that destroyed the retirements of tens of thousands of Enron employees owned an eight million dollar penthouse in Houston, Texas. If he suffered fines and other losses from his legal problems, he would just wait until everything had calmed down and then file bankruptcy in Texas. He could have been granted a Chapter 7 bankruptcy that will in effect wipe away all his debts. Then with all that behind him and his financial slate wiped clean he could have sold his penthouse and walked away with eight million dollars - Scot free! (Unfortunately for him, he died before he could sell his condo!)
Also, this new bankruptcy law will give birth to a whole new class of bankruptcy lawyer who will charge astronomical fees to the rich in return for clever new tactics that will help them get what the rest of us will be carefully refused - immediate debt relief.
On the other hand, the
increased cost of bankruptcy will now crucify the poor and minorities. For them bankruptcy
will no longer be available simply due to the cost. In the US there are millions of
single mothers
who struggle to keep their families together who will now be denied bankruptcy relief. As
a result many families will be crushed and find themselves homeless and dependent on
government hand-outs. So much for being "pro-family".
