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View Full Version : Should bankruptcy laws change?


Steve
10-01-2007, 12:02 PM
I thought this was an interesting article. There is a push from some groups to change the bankruptcy laws.

Should a judge be able to re-evaluate what a person in bankruptcy owes to their mortgage company?

What's your view?

Bankruptcy 'tweak' could save 600,000 homes (http://money.cnn.com/2007/10/01/real_estate/subprime_bankruptcy_change/index.htm?postversion=2007100111) - Under current law, when a person files for Ch. 13 bankruptcy, judges can not reduce mortgage debt owed on a person's primary residence, although they may modify mortgages on investment property or second homes.

Under the House bill, the bankruptcy judge would have the option of reducing what the homeowner owes the lender. Say a homeowner's property is worth less than what he owes. The judge could reduce the principal to match the home's current market value as well as reduce the loan's interest rate.