Daily Archives: January 11, 2009

New Bankruptcy Law

Citibank announced support for the Chapter 13 bankruptcy reform legislation which would allow cramdown of mortgages secured by residences.
Not all bankers are on board.
One trade group dumped on Citibank for supporting the bankruptcy reform that would help homeowners avoid foreclosure by allowing bankruptcy courts to re-write mortgages down to the balance owed, and to change the interest rate.
The Wall Street Journal joins the derision of Citi, accurately pointing out that the Government, having bailed out Citi, has more influence over it now than last year, when it opposed Chapter 13 bankruptcy reform.
Detrot Michigan bankruptcy attorney Kurt OKeefe will keep you posted on the breaking developments on bankruptcy reform, which could be on the President’s desk in two weeks.
And now Senator Levin is subpoenaing Citi records on what, if any, deal they made with the Feds before getting bailout money.
Levin is questioning whether Citi made any commitment to modify mortgages to help homeowners avoid foreclosure, or if they could just do whatever they wanted with the bailout money.
Although bankruptcy judges, being on the front lines of people losing their homes, support chapter 13 reform.