Limits on executive pay at companies who accept government money. This makes sense in theory, but in practice it would be a nightmare (how much is enough? Who gets to decide? For how long?). Paulson also believes it would deter companies from taking the money. He’s certainly got that right.
Sounds good to me … the part about the banks not taking the money. We should make the terms so onerous that only the truly desperate will take the money.
filers with higher incomes won’t be allowed to use Chapter 7, but will instead have to repay at least some of their debt under Chapter 13. All debtors will have to get credit counseling before they can file a bankruptcy case — and additional counseling on budgeting and debt management before their debts can be wiped out.
The first step in figuring out whether you can file for Chapter 7 is to measure your “current monthly income” against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7. If it is more than the median, however, you must pass “the means test” — another requirement of the new law — in order to file for Chapter 7.
[The banks must] complete credit counseling with an agency approved by the United States Trustee’s office. (To find an approved agency in your area, go to the Trustee’s website, www.usdoj.gov/ust, and click “Credit Counseling and Debtor Education.”) The purpose of this counseling is to give you an idea of whether you really need to file for bankruptcy or whether an informal repayment plan would get you back on your economic feet.
Counseling is required even if it’s obvious that a repayment plan isn’t feasible or you are facing debts that you find unfair and don’t want to pay. You are required only to participate, not to go along with any repayment plan the agency proposes. However, if the agency does come up with a repayment plan, you will have to submit it to the court, along with a certificate showing that you completed the counseling, before you can file for bankruptcy.
The Means Test
The purpose of the means test is to figure out whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to make payments on a Chapter 13 plan. To find out whether you pass the means test, you subtract certain allowed expenses and debt payments from your current monthly income. If the income that’s left over after these calculations is below a certain amount, you can file for Chapter 7.
If the change in the bankruptcy law was so great for consumers (and forced so many into bankruptcy) It should be just fine for the banks and everyone of Paulson’s friends.
Sauce for the goose is sauce for the gander.