This is Doug's area of primary interest. It has become particularly interesting in the last few years as the banks and credit card companies have been allowed to take advantage of unsuspecting consumers. Imagine my surprise to find out that somewhere in my long legal career that the lobbyists for the "financial" industry had managed to get an exception to Florida's usury statute that allowed credit cards to charge 25% interest. With vigorish like that, it probably won't be long unil the credit industtry is controlled by the mob.

As many of you have heard, the voices of conservatism have been industriously working to eviscerate the benefits of bankruptcy for consumers. The underlying philosophy of the bankruptcy code for many years has been that the overextended honest debtor gets a fresh start and the creditors get treated fairly. One major problem is that many creditors view this as a zero sum game and attempt to rig the game in their favor at the expense of the other players. Purchases of "luxury" items on credit has been frowned upon for many years by those who administer the bankruptcy law. The October, 2005 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) didn't so much protect Consumers as it did protect credit card companies. Purchase of luxury items was prohibited within ninety days of filing bankruptcy. Now, Capital One, Chase and Citibank are hiring law firms to oppose the discharge of debtors who purchased the luxuries of groceries and paid their rent.


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Closely related to bankruptcy, this option entails having an attorney contact creditors and negotiate reductions in the total indebtedness. Notice I said "an attorney." There are many scams in this area of the law and at least with an attorney you have the right to complain to the state bar if she promises more than she can deliver. I had one client who participated in a "restrucuring" plan for three years, and at the end of the three years he owed more than he had when he started. Congress, in its wisdom, has decreed that you must visit one of thes charlatans before you are eligible to file bankruptcy. Fortunately, this requirement can be satisfied by a short on-line or telephone counseling session with a US Trustee certified agency. Any competent attorney who practices bankruptcy can make the arrangements

Be careful if you decide to try a workout. I have had two agencies working for major credit card companies offer reasonable settlements, and then when I accepted the offer and sent them a check, they tried to act like it was a regular payment on account. Apparemtly this is not that unusual, there is a defense to a suit on debt called Accord and Satisfaction. Be sure to get the agreement in writing and try to comply with the conditions that always seem to be included.