U.S. top court says 2nd mortgages on 'underwater' homes cannot be voided in bankruptcy

Its a big deal.

It means that upon short-sale the holder of the second can obtain a deficiency judgement and garnish wages, seize assets in bank accounts (and brokerage accounts) and possibly seize personal property. More likely is that they sell that debt downstream to collection agencies who do the actual dirty work.

I'm not real sympathetic towards folks who ran up secured debt to buy toys and now face judgements and consent decrees but I feel bad for their kids.

At a meeting with the law firm I use I asked my attorney to analyze my exposure to lawsuits and they came back with "you are judgement-proof" so it is possible to setup your life in a way to totally protects you from collection if you are one of these folks facing this issue.
 
America is already "too forgiving" about discharging debt. After all, one person gets the benefits while another takes it in the shorts. There are too many "2nd chances", "mulligans" and "do-overs".

Let's bring back debtor's prison and put an end to some of this BS.
 
Scataphagos said:
America is already "too forgiving" about discharging debt. After all, one person gets the benefits while another takes it in the shorts.

Let's bring back debtor's prison and put an end to some of this BS.
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It is heading in that direction I think. They may not put people in an actual prison but they will force them into a sort of poverty/servitude.
 
377OHMS said:
It is heading in that direction I think. They may not put people in an actual prison but they will force them into a sort of poverty/servitude.
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It's already there. With non-discharged debt and collection agencies going after them with exorbitant rates and fees, they have no chance of ever getting out from under it. None.
 
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