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Congress Says Debtors' Thumbs May Be Amputated!

posted by John Pottow

Strictly speaking, this may not be true.  (The reason this may be so is because the statement is a complete lie of my own fabrication.)

Yet as we visit my parents where many old Canadians flee for the winter (Florida), I was struck by a radio adverstisement.  My dad has something called XM radio in his car, which I think is satellite, so I don't know if the adverstisers are local or national.  The ad was one of those super-hyped, manicly-overlapping succession of rapid rhetorical questions: "Trouble with credit?  Did you know you can consolidate your loans at a lower rate?" Etc., etc.

Here's the question that stuck out to me: "Did you know what new laws require you to pay back twice as much debt?"  (Or it may have been "Did you know new laws require you to pay back half of your debt?")

I wonder to readers who may have heard this or similar ads: Is this how credit consolidators and others are framing BAPCPA?  (In fairness, maybe it was some quirky state-specific law in Florida, or maybe I misheard, distracted by the challenge of driving with octogenarians.)  If this really is BAPCPA-puffing, then I think it is a strong illustration that perception may be more important than reality for new bankruptcy laws.  (Indeed, could ads like these literally be scaring people away from filing for bankruptcy?)  Worrisome, at least to me.

Comments

This is probably due to the Office of the Comptroller of the Currency raising the minimum credit card payment last winter. Most credit card companies doubled the minimum required payment. Overall, this is good for consumers, since it will lower interest payments and require credit card debt to be paid back sooner.

Brett

Client: "I heard that I am going to have to pay back all of my debts under the new law."
Lawyer: "Who told you that?"
Client: "My mother."
True email conversation - 10/17/2006

People are definitely being told by these 'consolidators' that BAPCPA will make them pay back all of their debts, that Ch 7 is basically unavailable unless you're poor, and that creditors will challenge their bankruptcies should they file.

I see people asking 'is this true' every day on several consumer credit boards I participate in. The amount of misinformation, from the lending industry and from other people in general is atrocious. These 'erase your credit card debt, get a home equity loan' ads are more prevalent than ever, and, of course, they don't tell you the ramifications of doing so and NOT changing your attitude towards credit or your spending habits.

The new one that gets me.. "get a home equity loan for your Christmas shopping" !

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