[SinisterBlueCat]

I am curious how the new bankrupcy laws will affect owners of small (very) incorporated businesses.

Personally, I do not have debt outside my mortgage, but my business does...any thoughts?

This is a great, and informative thread.

[aflurry]

OK. Whadabout this scenario: You get a new job and move to the suburbs and buy a nice house with faily long commute. After years of corporate deregulation, which benefited the financial institutions by the way, you get laid off, get a lower paying job at the quickie-mart 100 more miles down the interstate. Oil skyrockets, a couple of hurricanes hit. But your family is attached to the community you live in, and there's a chance all those resume's you sent out may procude something, so you go to the credit card next time you are at the gas station, and maybe again the next time.

Like the myth of the sheeple that the PO crowd loves to toss around, the myth of the agregious spender may be overpronounced. The increase in bankrupcy is not so much due to a steady erosion of moral resposibility, but to the erosion of the social cushion that used to protect working families against catastrophe, especially the common small catastrophes and their cumulative effects. debt is often the best of many poor options.

Though yes, as a culture we live extravagently. But conformity to the culture allows you to live successfully within the cuture. Kids got to have their Nike's to make friends who later turn into business contacts. Got to show off that big Tag Heuer watch at the board meeting. Further, it's your money invested at the damn bank after 80 hours of work a week, that gives them something to lend back to you.

Specop. This issue is not limited to personal responsibility. That is myopic. What matters more are the economic and social consequenses of the various ways of dealing with bankruptcy. Yes, it is your responsibility as individual or corporation, to uphold your half of a contract. But the laws govern what happens when the contract is NOT upheld, as a certain percentage will not be. Once that occurs, we must decide whether the goal of this legislation will be to punish and reward according to someone's moral standards (or you may prefer - criteria for maturity), or to attempt to mitigate the overall economic consequences of this happening on a large scale.

If we are about to see an explosion of defaults, we need to consider that creating a "new class of homeless" or indentured servant class, kept permanently from further participation in the economy by their debt load, may ultimately disadvantage all of us, even those like you and I whose debt record is clean.

It is interesting that conservatives lobby to reduce the taxation on the rich on the grounds that their money is better put to use in the economy, but at the same time they want to deny the poor similar concessions based on nebulous assessments of moral fibre.

[Hawkcreek]

--

[threadbear]

Aflurry, Very well put. I guess the moral of the story is people should try to live beneath their means, and build a cushion with their savings, in the event of an economic tsunami--their own or a collective one. Unfortunately, for many, living beneath your means has plenty of unpleasant connotations. You could be removing yourself from valuable social networks, and actually replacing it with something kind of scary.

When the middle class vacated the cities they took their sensibilities and lifestyle with them. Now cities, particularly on the coast, are inhabited by the upper, upper middle class and the poor. If you're upper middle and you want to trade down, there's only one place to go, social strata wise, and that's directly to a poor neighbourhood. And that would be just fine with many people, myself included. But if you add a high crime rate to the mix? If I had children--no way. I'd choose debt, or living on the financial edge, without a cushion.

The other alternative is to move to an outer ring suburb, but we all know how fraught with risk, energy wise, that is. So what's the solution? Does anyone have a viable alternative that makes sense?

BTW, I'm sure there are some terrific, socially cohesive inner city poor neighbourhoods. It's not about snobbery, it's about safety.

[emersonbiggins]

$this->bbcode_second_pass_quote('threadbear', '
')The other alternative is to move to an outer ring suburb, but we all know how fraught with risk, energy wise, that is. So what's the solution? Does anyone have a viable alternative that makes sense?

[rogerhb]

$this->bbcode_second_pass_quote('emersonbiggins', '')$this->bbcode_second_pass_quote('threadbear', '
')The other alternative is to move to an outer ring suburb, but we all know how fraught with risk, energy wise, that is. So what's the solution? Does anyone have a viable alternative that makes sense?

[jdmartin]

$this->bbcode_second_pass_quote('aflurry', ' ')

If we are about to see an explosion of defaults, we need to consider that creating a "new class of homeless" or indentured servant class, kept permanently from further participation in the economy by their debt load, may ultimately disadvantage all of us, even those like you and I whose debt record is clean.

It is interesting that conservatives lobby to reduce the taxation on the rich on the grounds that their money is better put to use in the economy, but at the same time they want to deny the poor similar concessions based on nebulous assessments of moral fibre.

[aflurry]

$this->bbcode_second_pass_quote('jdmartin', ' ')These same people will claim to know people who are driving Mercedes while living on welfare. It's a bunch of bullshit.