X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON-Spring is the opportune time to clean financial house as well as the tangible one, Senator Mike Crapo (R-Idaho) stated recently. Given that April is National Financial Literacy Month, it is a fitting time to get finances in order he said in a recent column submitted to several Idaho-based organizations. “Congress recently passed legislation that addresses the cost borne by all Americans when people allow their finances to spiral out of control,” Crapo wrote. “The Bankruptcy Reform Act of 2005 will relieve some of the aggregate burden that we bear when filers who have the ability to repay some debt under Chapter 13 instead file under Chapter 7 provisions.” The bulk of bankruptcy filings are legitimate and those are the filers the law is there to protect, he noted. “Bankruptcy laws were originally implemented to help people in catastrophic financial ruin. But a full seven to ten percent of bankruptcy filings (about 100,000 to 150,000) are abusive under the intent of the law, and cost consumers approximately $3 billion.” The means test should help alleviate this problem, according to Crapo, as well as targeting those who have “substantial” ability to repay. “Bankruptcy filings force financial institutions, the medical community and other creditors to recoup lost money. They raise interest rates, shorten grace periods and assess higher late charges and penalty fees to mitigate risk-all social costs borne by you, me and anyone else who uses banks, credit unions, or seeks medical care.” Though the law will address abuse of the system, he said, the “inordinate increase” in filings signifies a larger problem as unsecured consumer debt rises to new records.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.