Sunday, April 24, 2005

When 7 Means 2, And 13 Means 7

Once more I've learned something from Chris Whinery, mortgage broker and host of a local Sunday-morning radio show which I listen to without fail.

An offshoot effect of the new bankruptcy legislation:

Currently, when a petitioner is granted a Chapter 7 bankruptcy, his or her borrowing ability suffers for roughly two years from the date of the bankruptcy's completion. (Tougher to get a mortgage, refi, or anything else "significant" done in that time, according to Chris.)

With Chapter 13 cases, however, the petitioner's borrowing ability suffers throughout the length of the repayment period — typically five years — plus another two years after that. So, with more folks being routed into Chapter 13 via the new legislation, the borrowing prospects of more people will be hampered for a much longer period of time.

The point is that there's a big difference between two years of lowered borrowing capacity, versus seven years of lowered borrowing capacity.

While he's also a big advocate of personal responsibility on the part of consumer borrowers, Chris voiced concerns as to whether or not our lawmakers had fully considered the indirect effects such legislation might have on our economy. He is of the opinion that the one remaining "main cog" still driving our economy is consumers' easy access to credit via home-equity loans and refis. If this is taken away to any significant degree, he fears, things could come to a grinding halt.

Anyhow, I cannot recommend Chris' radio show enough, as well as Victoria Woods' "Financial Diva" show which follows his. I seem to learn a thing or two every week. Time flies by when I'm listening, so you know it's good stuff. If you can find some free listening time between the hours of 11am and 2pm CST on Sundays, you'll get to hear some great financial information and opinion — and most of it applies to consumers everywhere, not just in my area of the country.

The radio-show link above will take you to the page where you can select streaming audio over the 'net.


— Posted by Michael @ 2:29 PM

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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]