Michael Vick's bankruptcy plan all but confirms it for me...

[SunnyD]

This post really isn't about Vick - I'm just using it to point out the idiocy of bankruptcy.

According to his finances, he owes some $20 million with assets valued at $16 million.
Under his "Revised" plan, Vick can expect the following:

» Up to $750,000, 10% of earnings would go to creditors.
» $750,000 to $2.5 million in earnings, from 20 percent under the old plan to 25 percent under the new one.
» $2.5 million to $10 million, from 25 percent to 30 percent.
» Over $10 million, from 33 percent to 40 percent.

Now I'm sorry, but if you file for bankruptcy and owe $20 million, and have any sort of "reasonable" expectation to be able to pay it back, how about you keep the first $50,000 of whatever you make and the rest go to creditors until it's paid off?

Honestly, is this how bankruptcy works for the "big boys"? Really? Average schmuck American citizen files for bankruptcy and basically is lucky if they keep their house.

Now granted, in this case Vick will be lucky if he ends up making more than 6 figures in the long run, but still. I would be oh so heartbroken if I had to file bankruptcy, and still pull in (arbitrarily) $225,000 a year while satisfying debt obligations.

:| /rant

 

[Insomniator]

Bankruptcy doesn't really do anything... My dad bought a new TV, Fridge, and Piano before filing for bankruptcy because he knew it doesn't mean anything. This was back in 95 so the laws are a little different now but basically, you keep everything, owe nothing, and have really bad credit for a few years.

Now his credit score is back to near perfect and its like bankruptcy never happened. Wonder who paid the hundred grand he owed...

Vick is the same deal on a much bigger level.

 

[geno]

We live in a country where companies which we, the taxpayers, are paying to keep afloat while their top brass earns, in some cases, record breaking bonuses. There is no accounability for those earning millions. It's baffling. Meanwhile, the poor schmucks at the bottom, making 30K a year, will have their lives practically ruined if they fail to pay up on so much as a credit card bill.

 

[SunnyD]

Originally posted by: Insomniator
Bankruptcy doesn't really do anything... My dad bought a new TV, Fridge, and Piano before filing for bankruptcy because he knew it doesn't mean anything. This was back in 95 so the laws are a little different now but basically, you keep everything, owe nothing, and have really bad credit for a few years.

Now his credit score is back to near perfect and its like bankruptcy never happened. Wonder who paid the hundred grand he owed...

Vick is the same deal on a much bigger level.

Yeah, back in the day bankruptcy was "meh, whatever". I think the rules changed sufficiently now though that an average person, unless they have a clue, is all but screwed when they file.

 

[geno]

Originally posted by: Insomniator
Bankruptcy doesn't really do anything... My dad bought a new TV, Fridge, and Piano before filing for bankruptcy because he knew it doesn't mean anything.

It's good to know he stocked up on the essentials before letting someone else foot his bill. :disgust:

 

[SunnyD]

My question is, on a lesser scale, what chance would an average person have with a judge to approve a similar (though obviously scaled denomination) plan? As in knock a couple zeroes off the monetary values there.

 

[Gothgar]

Originally posted by: geno
We live in a country where companies which we, the taxpayers, are paying to keep afloat while their top brass earns, in some cases, record breaking bonuses. There is no accounability for those earning millions. It's baffling. Meanwhile, the poor schmucks at the bottom, making 30K a year, will have their lives practically ruined if they fail to pay up on so much as a credit card bill.

the rich get richer and the poor get fucked

 

[RagingBITCH]

Originally posted by: SunnyD
My question is, on a lesser scale, what chance would an average person have with a judge to approve a similar (though obviously scaled denomination) plan? As in knock a couple zeroes off the monetary values there.

Two of my friends filed (they got hosed in their divorces and stuck with about $20K of debt their partner had, or rang up very very quickly) Their credit was hosed on getting a CC w/ a decent interest rate, and good luck getting a loan, but it's hardly like they are fvcked for life. My best friend (one of the two) kept his house, car, yadda yadda. I think you've just listened to one too many sob stories on TV about people losing it all.

 

[mugs]

If Michael Vick is allowed to play in the NFL again, then under that plan he'd be back in the black within a few years. It sounds like he'll be paying back everything he owes, or at least a much larger percentage of it than the average Joe who racks up a lot of credit card debt and then has it wiped out with bankruptcy.

 

[AccruedExpenditure]

Bankruptcy is part of the cost of doing business for creditors. I don't see anything wrong with the payoff plan
-AE

 

[SunnyD]

Originally posted by: AccruedExpenditure
Bankruptcy is part of the cost of doing business for creditors. I don't see anything wrong with the payoff plan
-AE

The problem is he can't obviously "support" his debt obligations, and hence default "forcing" him to file bankruptcy. However, assuming ANY of those income levels, he would be living far beyond what average Americans live on - and those Americans aren't working a bankruptcy settlement at the same time!

In his case, assuming ANY of those levels, he should be forced to give up more like 90% to creditors until it's paid off, if not more. "Oooh my ohh me, I'm bankrupt, but still making millions per year! What shall I ever do?"

 

[AccruedExpenditure]

Originally posted by: SunnyD

Originally posted by: AccruedExpenditure
Bankruptcy is part of the cost of doing business for creditors. I don't see anything wrong with the payoff plan
-AE

The problem is he can't obviously "support" his debt obligations, and hence default "forcing" him to file bankruptcy. However, assuming ANY of those income levels, he would be living far beyond what average Americans live on - and those Americans aren't working a bankruptcy settlement at the same time!

In his case, assuming ANY of those levels, he should be forced to give up more like 90% to creditors until it's paid off, if not more. "Oooh my ohh me, I'm bankrupt, but still making millions per year! What shall I ever do?"

I definitely see what you're saying but creditors didn't offer him credit based on whether he has the income of an ordinary American so I don't have a problem with him paying off his debt like he's not an ordinary American. I'd take issue if it was my money (e.g. taxpayer money) but since private institutions gave him the money, I'm ok with whatever repayment agreement they come to.

Bankruptcy laws and practices are written for the wealthy to preserve their ability to recreate/obtain wealth in the future. And I'm ok with that - I mean if a private company goes bankrupt should 90-99 percent of future earnings go to debt/credit repayment or should a more reasonable 25-30 percent go to debt payment giving the company to invest in ventures that might boost future earnings? While people like Vick aren't likely to re-create the circumstances that justified them being extended the level of credit that was extended to them, generally speaking bankruptcy laws allow enterprises and individuals another chance to regain what was lost when things don't go as planned.