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Senator Dodd announced new bankruptcy reform legislation, ignores credit, collections, banking

A reader just sent me this link, thank you!

Bankruptcy reform is definitely necessary and it’s nice to see an actual PLAN and not just the slogans the other candidates put out.

A New Beginning for American Families: The Dodd Plan for Fair, Practical Bankruptcy Reform

Chris Dodd understands that sometimes life deals even the most honest, hardworking Americans a bad hand. He knows that the vast majority of Americans who file for bankruptcy do so because of a financial crisis beyond their control—often a catastrophic health care incident. Recent studies show that nearly half of all people who file for bankruptcy protection do so because of medical reasons. Almost as many are due to the loss of a job or divorce. Unfortunately, today’s bankruptcy laws—recently re-written by the credit card companies, passed by a compliant Congress, and signed into law by President Bush—disproportionately penalize our most vulnerable families and leave them without a safety net. While Chris Dodd believes personal responsibility is a fundamental American value, he understands that people who spend a lifetime working hard should be provided the opportunity to start again. As President, he will work to repeal the most egregious provisions of the bankruptcy “reform” law, particularly the harsh legal and monetary barriers that punish elderly Americans from coping with medical costs, single women who are heads of households, and families whose finances have been complicated by divorce or a job layoff.

In a Dodd Administration, hardworking people who have fallen on hard times will be afforded a new beginning that re-establishes a safety net and helps families get back on their feet. As President, he will:

Modify the means test to ensure families have sufficient resources to live on
Protect children, not creditors
Ensure all medical debts are dischargeable
Permit bankruptcy courts to restructure mortgages so families can stay in their homes
Allow private student loans to be dischargeable

But just as importantly, America needs a President who knows how to get results, and who will bring people together to turn Democratic principles into American policies. Recognized for his independence and leadership in the fight against so-called bankruptcy “reform,” Chris Dodd was one of only 25 Senators to vote against the 2005 bankruptcy “reform” bill and the only Presidential candidate in the Senate to repeatedly vote against bankruptcy legislation that failed to protect children and families. As President, Chris Dodd will rebuild the bankruptcy safety net and distinguish between those who have worked hard and played by the rules and those trying to walk away from their responsibilities

... [the details about the plan]

But there are some problems:

1) Why announce PLANS to introduce this legislation?  When is this supposed to happen?

This would be THE perfect time to change the bankruptcy law.  NOW is the time. It will show where the OTHER presidential candidates who are currently Senators and Representatives stand.

2) Any new bankruptcy law should contain provisions to require CORRECT reporting of the discharged and reaffirmed accounts by all listed/notified creditors and come with STATUTORY $2,000 damages for:

a) reporting an outstanding balance

b) reporting late payments AFTER the filing date

c) reporting a date closed after the filing date or omitting the date closed

d) reporting the discharged account as charged off without the bankruptcy notation

e) reporting reaffirmed accounts with the bankruptcy notation (KILLING the FICO scores as they are rated as CURRENTLY delinquent by scores, even though NEVER paid late)

f) NOT reporting reaffirmed and paid as agreed auto loans and mortgages at all (lowering credit scores as the GOOD payment history is not reported, a HUGE problem!)

e) SELLING the discharged account (often resulting in renewed collection efforts such as credit reporting and the consumers don’t even KNOW that new collections destroy their scores unless they continually monitor their credit, i.e. waste a lot of time and money.)

Obviously, there’s a conflict with the FCRA, as it ONLY allows for legal action after a consumer disputed with a CRA and the creditor VERIFIED incorrect data.  I’ve documented here that some creditors (such as Bank One) even argued that they can report discharged accounts as charged off (making it look like the consumer could be sued for the outstanding balance) and the OCC SUPPORTED Bank One.

After bankruptcy disputes are some of my favorite credit work.

It is so satisfying to see the scores substantially increase from the 500s—IF all creditors correct the reporting.

But it is also extremely frustrating to continually have to charge clients for additional work because creditors CHANGE the reporting.  In fact, I don’t think ANYBODY should have to pay me for corrections to the credit reporting.  If banks are not competent to report credit data accurately, they should not be allowed to do business.  A typical example:

Capital One AGAIN deletes date closed with TU - FICO score down to 617

Trans Union FICO score up by 81 points after DATE CLOSED correction - TU subjects client to ID theft

My client has done NOTHING to deserve this, is a disabled vet (served in Iraq) and now has cancer and an autistic girl.

NOBODY should have to continually purchase the myFICO reports just to see whether “something” got screwed up again and then pay me again to figure out what exactly to dispute.

And we can’t just continually spend our hard earned tax $$$ on bailing out the corporations.  Yes, I agree that consumers in foreclosure ought to be helped.  HOWEVER, we have to attack the problem by the root and ensure that from now on the CORPORATIONS pay for their mistakes!

We have to make LIES illegal and provide statutory damages for false statements by loan agents.  We have to simplify the court rules and explain the rules and provide sample pleadings for consumer litigants. 

We have to change the judicial system to make if FAIR and to give consumers a chance to prevail in court. 

Even when I did prevail in my litigation, I spent way more $$$ and time than I got in the settlements.  Only LAWYERS are entitled to compensation for their time and consumer litigants are treated worse than slaves.  At least the slaves got free food and housing.  I get NOTHING for MY work!

The lying corporate lawyers are protected by the litigation privilege (the right to lie to the court)

We need laws prohibiting lawyers from LYING in court filings and in communications with consumer litigants. 

Because they know that I can’t get reimbursed for my time, they completely ignore my attempts to resolve discovery issues, continually lie to me and deceive me, I have to waste MY time and file motion after motion to try to get hostile judges to even look at discovery issues.  Next week I have to drive to Phoenix (500 mile round trip, hotel, etc.) to attend the discovery hearing because Focus attorney Fulton ignored the court’s order to contact me.  I STILL don’t have any responses to my discovery requests to collector James Hurd, served on 8/31/07.

There are so many problems, changing only the BK laws is just not sufficient to make a difference.  As many of my clients have filed for bankruptcy, I know that they are very likely to become repeat filers NOT because they can’t manage their money, but because the low FICO scores force them into defaults.

WaMu Visa charging 26% interest, refused to lower rate

I understand that you can’t get everything done at once, but I’d like to see a comprehensive plan addressing the issues.  While not comprehensive due to the lack of time and money, a lot more information including about FICO scoring and FDCPA issues is at http://creditlegislation.org/

Hmm, I wanted to submit the URL and request comments, but I can’t find any way to contact Senator Dodd at http://chrisdodd.com/ Apparently all you can do is send money and sign petitions.  Bad start ...

So I went to his Senate site:

U.S. Senate Committee on Banking, Housing, and Urban Affairs, Committee Chairman

As Chairman, Senator Dodd sets the committee’s agenda; guiding the consideration of legislation under committee jurisdiction.

Please visit the Banking, Housing, and Urban Affairs Committee website for more information: http://www.Banking.Senate.gov

It’s incredible how far removed the legislators are from reality.

I understand, they’re wealthy, they get preferential treatment by the credit bureaus, no collector would call Senator Dodd and threaten with credit reporting of an entirely fraudulent and disputed debt unless he PAID.  Nor would a CRA or collection lawyer dare to file frivolous filings just to rack up legal fees and trying to bankrupt them.

But why aren’t legislators listening to their constituents?

Senator Dodd, the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs has NO clue about the tremendous problems with credit reporting, collections and the ongoing fraud and deceit by the banks and corrupt courts and judges?  Or he doesn’t care?

Senator Dodd doesn’t know that many people are forced into bankruptcy by FICO scores designed to CAUSE defaults?

FICO scores are artificially lowered by late payments ADDED by Fair Isaac’s credit scoring software?

I submitted this URL at Senator Dodd’s web form.

I’ll update with the results.

UPDATE:  I just added a new category for the 2008 presidential candidates at The 2008 Presidential Campaign.  I’m NOT picking on Senator Dodd, but will contact all candidates - as time permits.  Actually, Ron Paul and Dennis Kucinich and his wife Elizabeth were supposed to be first.  It just so happened that a reader sent me the link to the Dodd bankruptcy reform legislation today and I got sidetracked.