The Executive Office for the U.S. Trustees today released the names of companies approved to serve as credit counselors. Most of those in this initial list provide so-called debt-management plans.
The new bankruptcy law, which takes effect next month, requires bankruptcy filers to undergo credit counseling as a condition of eligibility. Read the full list.
Fed Raises Interest Rate
The Federal Reserve this afternoon boosted to 3.75 percent the federal funds rate -- interest that banks charge each other, CongressDaily reported. It was the 11th straight increase in the rate, and the Fed said that more increases might be coming despite the damage caused by Hurricane Katrina. "While these unfortunate developments have increased uncertainty about near-term economic performance, it is the committee's view that they do not pose a more persistent threat," said members of the Federal Open Market Committee in a statement accompanying the announcement of the rate hike. The decision was not unanimous, however, as Federal Reserve Governor Mark Olson cast a dissenting vote to leave the rate where it was.
Bankruptcy Relief and Natural Disasters
The Congressional Research Service has issued a report, Bankruptcy Relief and Natural Disaster Victims, which considers whether bankruptcy law in general, and the BAPCPA in particular, may present unique challenges to financial recovery for those whose lives, livelihoods and/or homes have been damaged or destroyed. Read the report.
ALEC Releases Report Highly Critical of Asbestos Litigation Reform Legislation
The American Legislative Exchange Council (ALEC) released yesterday studies on The Fairness in Asbestos Injury Resolution (FAIR) Act of 2005, and found the legislation to be fundamentally flawed. The report, prepared by Bates White, a Washington, D.C.-based economic consulting firm, was released yesterday at Mealey's National Asbestos Litigation Conference in Philadelphia.
The Bates White study found that the FAIR Act, which removes asbestos claims from the courts and creates a $140 billion asbestos trust fund to be financed by defendants and insurers, has one prevailing problem that cannot be overcome: it will be bankrupt in just one to three years. The study determined that this financial shortfall will result primarily from many individuals with lung and other cancers, who were not historically compensated with asbestos lawsuits, to now be compensated by the FAIR Act. Additionally, claimants who have settled with most, but not all defendants, could now be able to use the FAIR Act to recoup additional payments.
According to the study, the FAIR Act would create asbestos claims worth between $301 billion and $561 billion for individuals who assert a work history either with, or in the vicinity of, asbestos. Since the funding level of the Trust Fund is $140 billion over 30 years, the result would be a funding shortfall of $161 billion to $421 billion and could leave 383,000 to 913,000 potential future asbestos victims uncompensated. Read the full story.