No Bankruptcy Break For Hurricane Victims
Lawmakers turned back efforts last week to delay the Oct. 17 effective date of the new consumer bankruptcy law, even as tens of thousands of Gulf Coast residents were expected to be pushed over the financial brink, first by Hurricane Katrina, then by Hurricane Rita.
Some lawmakers were asking that the new law, which will make it tougher for debtors to erase all of their debts and relegate them, instead, to a financial reorganization, should be extended in order to assist the victims of the two hurricanes, many of them who lost their homes and jobs. Large portions of them did not have flood insurance on their homes or businesses and will have no way of repaying mortgages and others loans. Many of them, still, will be forced into bankruptcy by the biggest natural disaster to ever hit the U.S.
But congressional leaders last week were rejecting calls for an extension of the effective date of the new law, saying that it already makes accommodations for the most destitute of debtors. White House officials were also saying they do not support efforts to extend the deadline.