I heard that the ol' trick that people used of buying Florida property to hide their assets is gone. Folks like OJ Simpson, would buy an estate worth a few million in Florida, because the personal residence was untouchable in court settlements and bankruptcy.

Now, only the first $150K is. And there are a bunch of other requirements.

Something like that. Maybe somebody can find a link to clarify the rules on this one.

Muck,

Former iterations of the bankruptcy reform bill would have imposed a nation-wide limit of $150,000 in home equity as exempt from attachment by the trustee in bankruptcy. With the collapse of Enron, Worldcom, HealthSouth, and other corporate frauds, Republicans awakened to the reality that this provision would affect rich corporate executives almost as much as the bubba who lives in a shack or a double-wide.

So, Tom Delay arranged for a small change in the 2005 bankruptcy bill. Now, any state's law that grants exempt status to more than $150,000 in home equity for a debtor can be utilized by a bankrupt but only if they have lived in that state for at least two years prior to filing for bankprutcy.

Fraudulent CEOs on the run need only make the move two years before a civil judgment is entered against them. That's no trick for a rich guy. It's harder when you earn minimum wage and can't squeeze by the pile of all those credit card solitations to get out the door.

A few select states have no limit on home exemptions. Read the article I linked to At page 553. There, the states with unlimited homestead exemptions are listed as Texas (think Enron), Florida (Sullivan's home as of two yars ago), Maryland MBNA executive, Delaware (Joe Biden), Minnesota, Oklahoma, Kansas, Arkansas, Iowa, and South Dakota (Citibank executives).

The new bankruptcy bill still protects the likes of Bernie Ebbers and Scott Sullivan (Worldcom), Dennis Kozlowski (Tyco), John Rigas (Adelphia), Frank Quattrone (Credit Suisse First Boston), Ken Lay (Enron), Richard Scrushy (HealthSouth) and other Republican CEOs who defrauded their investors but will be saving their multi-million dollar Florida or Texas "vacation homes" even after taking bankruptcy.

Unfortunately, if you live in a rental, a clapboard bungalow, a trailer, or a nursing home ... well, almost everything you own will be seized by the trustee if medical bills are incurred that can't be paid.

But maybe Joe Biden or Ken Lay would let you stay a few days in his place.

larre, great post...it is even worse than I first imagined.

It's all part of the "ownershop society" where 2 percent of the population owns everything. That used to be called feudalism. Do you like the idea of being an indentured servant? You had better get used to it.

The interesting thing that I see in this bankruptcy bill is the timing, in the last few years most of the growth in consumption came from americans getting more in debt, by people remortgaging their homes or getting hooked on the easy credit card money.

With the double deficits and the falling dollar its probable that the FED will have to raise interest rates by a significant margin. Lots of people will be crushed by those debts.

So it makes perfect sense for the credit card lobby to be worried with bankruptcy.

But with this new bill they got bailed from that risk and the middle class americans got stuck with it.

Way to go...

Good comments all.

Great comments larre.

There, the states with unlimited homestead exemptions are listed as Texas (think Enron), Florida (Sullivan's home as of two yars ago), Maryland MBNA executive, Delaware (Joe Biden), Minnesota, Oklahoma, Kansas, Arkansas, Iowa, and South Dakota (Citibank executives).

The new bankruptcy bill still protects the likes of Bernie Ebbers and Scott Sullivan (Worldcom), Dennis Kozlowski (Tyco), John Rigas (Adelphia), Frank Quattrone (Credit Suisse First Boston), Ken Lay (Enron), Richard Scrushy (HealthSouth) and other Republican CEOs who defrauded their investors but will be saving their multi-million dollar Florida or Texas "vacation homes" even after taking bankruptcy.

Other blogs should pick up these comments.

Maybe cable "news" should too.

Bill Moyers had a show on MCI/Ebbers wherein they explained how Ebbers had accepted untouchable compensation (rainy day fund)in the form of land (in Tennessee I beleive) representing a ton of money.

From frontline:
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/wcom/players.html

Over the years, Ebbers had accumulated a private business empire, which included a luxury yacht named Aquasitions, a lumber mill, a ranch in Canada and a half million acres of timberland across Mississippi, Tennessee, and Alabama. Records of the 1999 timberlands purchase show that a $499 million loan, later folded into a billion dollar mortgage, was arranged by Travelers, a Citigroup subsidiary, and backed by WorldCom stock. Critics argue that Citigroup should have disclosed its interest in keeping WorldCom shares high in order to guarantee the loans, and note that Grubman kept a "buy" rating on the stock, even as shares were plummeting.

Good info. and comments.

Think that these guys also need to be personally embarrassed,mocked, scorned whenever sighted out in the real world. Eggs maybe?