While the survivors of Katrina are worrying about hour to hour
survival, most have forgotten that the next mortgage payment is due
soon.

I am interested in hearing your thoughts on this subject...and consider
if it had been your home/business.

TMT

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http://news.yahoo.com/s/nm/20050901/...y_dc&printer=1

New bankruptcy law a problem for Katrina victims By Jonathan Stempel
Thu Sep 1, 6:41 PM ET

Hurricane Katrina is expected to cause a spurt of bankruptcy filings by
storm victims -- and sweeping changes in U.S. bankruptcy laws may leave
them even more strapped than they otherwise might be.

The Bankruptcy Abuse Prevention and Consumer Protection Act, which
takes effect October 17, includes a slew of rules and restrictions
intended to curb abuse. These are expected to make it harder for
individuals to file to keep creditors away, and more difficult for
businesses to reorganize.

But the law wasn't directed at people who file because of catastrophes
such as Katrina, in which people lost homes, businesses and perhaps
months of regular paychecks. Katrina has caused widespread devastation
in Louisiana and Mississippi and left New Orleans, population 462,269,
virtually uninhabitable.

"People who are seriously affected by this hurricane are not going to
be able to file bankruptcy by October 17," said Henry Sommer, co-editor
of "Collier on Bankruptcy," a leading reference work. "They have more
pressing things in their lives, like survival."

Michigan's John Conyers, the ranking Democrat on the U.S. House of
Representatives' Judiciary Committee, and three other House members
pledged to soon introduce legislation to provide flexibility for
victims of natural disasters in bankruptcy.

Conyers' aides said legislation may be introduced next week, but aides
to House Republicans said the law doesn't need amending because it only
cracks down on abuse. Aides to Sen. Russ Feingold (news, bio, voting
record), a Wisconsin Democrat, said he might try to postpone the
October 17 implementation date.

COURTS CLOSE

For now, New Orleans' federal bankruptcy court is closed indefinitely,
and referring emergency filers to the bankruptcy court in Baton Rouge,
which is Louisiana's state capital. Courthouses in Alexandria, Lake
Charles, Monroe, Opelousas and Shreveport are also taking emergency
filings.

But there may be a reprieve soon.

A spokesman for the Administrative Office of the U.S. Courts said
officials there are asking Congress to let federal district and
bankruptcy courts in New Orleans move temporarily, perhaps to Baton
Rouge or Shreveport.

Bill Gates, deputy in charge of the Alexandria office, said there is a
"very good likelihood" that by late next week a satellite bankruptcy
court office will open in Baton Rouge.

"Once they get that opened, they'll essentially be running as close to
normal as possible," said Gates.

Courthouses also remain closed in Jackson, Mississippi and Mobile,
Alabama.

LENDERS TAKE STEPS

Under the new bankruptcy law, individuals who file will face extra
paperwork and costs, and many will be subject to a "means test" that
will force them to pay off at least some debts. Businesses will face
new time limits that could force them to make key business decisions
before they're ready.

Some lenders are trying to accommodate Katrina victims already. Ford
Motor Co.'s finance arm on Thursday said it will let customers defer
three loan payments, up from the two it offered on Tuesday. And banks
such as Wachovia Corp. are relaxing some fees and providing loan
assistance.

"Banks have a lot of experience dealing with debtors in difficulty
because of natural disasters," said Wayne Abernathy, an executive
policy director at the American Bankers Association. "The first focus
will be on making sure people can meet their immediate financial
needs."

Still, Lynn LoPucki, a bankruptcy law professor at the University of
California at Los Angeles, said it's hard for debtors to get
individualized attention in an event of Katrina's magnitude. "There are
simply too many," he said.