Forum Post: The Reasons behind the New Bankruptcy Laws

Were these new bankruptcy laws laid-out by the banks because they were already aware of an economic collapse on the horizon? Here's a simplistic timeline to understand what needs uncovered:

In September of 2004, the FBI had investigated and found mortgage fraud on the verge of reaching an "Epidemic Level." It was announced throughout the news media. So the banking industry got their first clue of what I'm sure they already knew was going to happen anyways. But instead, these well educated, financial geniuses who work with your money and 401K's just looked the other way.

In October of 2005, new bankruptcy laws were passed. These new laws protected all financial institutes from debt being completely removed from the consumer....no more "clean slate." All debt was to be repaid under a new five year plan and any assets owned 100% by the consumer was up for grabs in auctions, repossessions, etc. This means the banks can take anything you might have paid off and outright own such as a home, a car, furniture, appliances...anything.

Enter the Fall of 2008 and the economic collapse. For the first time, banks were no different than the average American. They had accumulated so much debt that exceeded their income. We were one in the same. They were no different than us.

But instead of following through bankruptcy procedures like anyone of us, they knew they couldn't win over the very same laws they designed with Congress in 2005. So, they capitalized on an election year (2008) for a bailout. No politician was going to risk losing their re-election because they didn't vote to save our economy. So they got the hard earned, taxpayer's money. Your Money! Instead of playing by the rules of the new bankruptcy laws such as putting their elaborate jets, penthouse offices, executive's pensions, and all other luxury items up for grabs, they got a bailout. And they achieved it with the help of the very same people who helped implement the new bankruptcy laws...Congress.

I find it repulsive when I read from people in here lecturing about "it's your fault for spending beyond our needs" and "you don't deserve any help for your reckless actions." Banks were no different than us. Shame on you!