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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (37096)	9/14/2005 2:21:39 AM
From: mishedlo	Respond to of 116555

yep but the appearance is that everything is OK. Appearances matter more than reality Mish

To: patron_anejo_por_favor who wrote (37096)	9/14/2005 2:25:03 AM
From: mishedlo	Respond to of 116555

Bankruptcy law could hit before storm victims can file By Kathy Chu, USA TODAY Many of the individuals and businesses taking the hardest financial hits from Hurricane Katrina might not be able to declare bankruptcy before restrictive provisions of a new law take effect Oct. 17. In the past two decades, bankruptcy filings in states hit by hurricanes and tropical storms increased 1 1/2 times those in states not affected by the same storms, according to research by Robert Lawless of the University of Nevada, Las Vegas. The biggest increases didn't come until two to three years after the hurricane. Consumer advocates and Democrats want Congress to delay the law — which makes it harder for individuals and businesses to wipe out their debts — or exempt hurricane victims. Under the new law, fewer individuals will qualify for Chapter 7 bankruptcy, which erases obligations. Many will have to file under Chapter 13, which will require them to pay back some debts. Many businesses will be bound to an 18-month deadline to file a reorganization plan. Rep. Louise Slaughter, D-N.Y., is sponsoring a bill to postpone the law's implementation for two years for everyone, because "victims are all over the country now." Rep. John Conyers Jr., D-Mich., has a bill that would exempt certain hurricane victims who file for bankruptcy from the new law's income tests and credit-counseling requirements. The bill would give courts the discretion to extend bankruptcy deadlines for businesses. The Bush administration is looking at "a long list of ways to help those affected by the storm," including providing them with some relief from pending bankruptcy rules, says White House spokesman Trent Duffy. There's a legal barrier to giving hurricane victims special treatment, says Sam Gerdano, executive director of the non-partisan American Bankruptcy Institute, whose members include attorneys, judges and lenders. "The Constitution speaks of the uniform law, and the law has to be the same for Louisiana as it is in Indiana." Even if the law goes into effect, courts are likely to be lenient with those who want to file bankruptcy but whose financial documents have been swept away by the hurricane, he says. The American Bankers Association, which supports the new law, agrees. "The law, as changed, removes some of the discretion and lack of rules there might have been in the past, but it doesn't eliminate the flexibility that you need when there are unusual circumstances," says ABA Executive Director Wayne Abernathy. usatoday.com