Bankruptcy Relief May Be On the Horizon

by Karoli on January 7, 2009 · 2 comments

A bullet point within his economic agenda says:

Obama and Biden will create an exemption in bankruptcy
law for individuals who can prove they filed for bankruptcy because of
medical expenses. This exemption will create a process that forgives
the debt and lets the individuals get back on their feet.

This is great news for those who are facing bankruptcy or have already declared bankruptcy because they simply couldn’t pay the bills.

What isn’t clear is how debt forgiveness will work. Right now, declaring bankruptcy does not release individuals from the obligation to pay the bills. Discharging debt will leave hospitals and providers with a need to write off assets, which will certainly cause a tilt on their balance sheets.

Still, it’s a step in the right direction, no question.

Tagged as: economic stimulus, Obama, policy, reform

WebPixie

This is indeed promising news, depending on when and how it's implemented. If I'm not mistaken, though, I think bankruptcy laws vary to some extent from state to state.

It would help more people in the US become productive once again, after a long illness or disability. It sometimes takes awhile but, sooner or later people unable to work find themselves buried in the debt that builds faster and faster through the miracle of compound interest.

Great for those who hold the debt!

Devasting for the person who owes while trying to get back on their feet following an unexpected health crisis. It's all the worse when the health crisis involves a long time for recovery.

I, as I expect many others, will be watching this space for news on THIS topic!
WebPixie

This is indeed promising news, depending on when and how it's implemented. If I'm not mistaken, though, I think bankruptcy laws vary to some extent from state to state.

It would help more people in the US become productive, once again, after a long illness or disability. That can only be a GOOD thing for the overall economy. It sometimes takes awhile but, sooner or later, people unable to work find themselves buried in the debt that builds faster and faster through the miracle of compound interest.

Great for those who hold the debt!

Devasting for the person who owes it while trying to get back on their feet following an unexpected health crisis. It's all the worse when the health crisis involves a long time for recovery.

I, as I expect many others, will be watching this space for news on THIS topic!