Mississippi and Louisiana lawmakers in Congress are drafting Katrina relief legislation that would offer hurricane victims additional protection when new bankruptcy laws go into effect next month.
Katrina victims recently fell prey to mighty credit card champion and Judiciary chairman James Sensenbrenner (R-WI), who refused to hold hearings to address relief for Katrina victims. Thirty-one Congressional Democrats had voiced support for waiving the more onerous provisions of the new law for Katrina victims "to insure that we do not compound a natural disaster with a man made financial disaster."
Under the new bankruptcy legislation, homeowners' exemptions from liability are much more limited than in the past. As previously reported, many homeowners who have refinanced their homes will be shocked to find that under the new bankruptcy act, they are liable for the full value of their home if it is destroyed.
The bankruptcy "reform" law restricts home equity protection to $125,000, if the buyer bought the house within four years of filing for bankruptcy.
The measure Sensenbrenner blocked would "prevent new bankruptcy provisions from having adverse and unintended consequences for the hundreds of thousands now facing financial catastrophe by providing needed flexibility for victims of natural disasters in bankruptcy proceedings," Reps. Sheila Jackson Lee (D-TX), John Conyers Jr. (D-MI), Mel Watt (D-NC), and Jerrold Nadler (D-NY) said in a joint statement.
Comments