The Truth of Credit

Today I was reading an article in the Wall Street Journal regarding Barack Obama’s proposed changes to the 2005 Bankruptcy Laws. First a foremost this is not a political blog so I will try to keep my opinion to myself. Obviously, with a Democrat controlled Congress and current state of the US economy revisions to the law are sure to be priority if Barack becomes president.

Here is what the Obama Camp is proposing::

1. Power to court’s to renegotiate mortgages on debtor’s primary residence
2. Extra protections to uninsured people wiped by massive medical payments , disaster victims, and military.
3. Standardize state’s “exempt assets” laws.
4. Establish “Homestead” level to protect certain homeowners against creditors
5. Waive credit counseling and means testing.

The TRUTH is this will be a hot button issue in the coming months. Certainly, both candidates will be on opposing sides of the issue (McCain voted for the 2005 bill). The underlying problem here is how the banks will react to this news. Credit is tight as is, no one will deny that. However, with it being easier to file bankruptcy the banks will raise interest rates if for nothing else in protest. So what do you think needs to change? Is it too hard to file bankruptcy now?

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