Rushing to beat an October deadline when the biggest overhaul of the bankruptcy law in a quarter century goes into effect, rising numbers of Americans have filed for protection in the four months since the law was changed, seeking to have their debts erased.

Under the revised law, debtors who earn more than the median income in their state and who can repay at least $6,000 of their debt over five years will no longer be able to have their debts wiped out for a fresh start.

So, if you earn over the median income and can pay $100 a month, you can no longer file a BK, no matter how crushing your debt load is. Sure, people should pay back what they borrow, but what if, say, the breadwinner in a family dies or can’t work? These news laws allow no flexibility.

Instead, they will have to seek protection under Chapter 13, which requires a repayment schedule.

Which might well mean no way out. Most bankruptcies are due to medical expenses or job loss (not people gaming the system) so under these onerous new laws, debtors could pay forever, maybe not even keeping up with the interest charges, much less the principal.

Plus, these new laws give credit card companies billions in new profits by allowing them to raise interest rates to loan shark levels of 25-30% while it simultaneously insures consumers have few workable options. How cosy. The rich get richer, the poor and middle class get shafted.

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From Sue

Mississippi probably will file criminal charges against accounting giant KPMG because it created a tax strategy that the state says illegally let WorldCom, now called MCI Inc., shield billions of dollars from taxes, sources close to the case said Friday.

KPMG devised MCI’s tax strategy, which treated management foresight as a royalty. Mississippi says it would not have approved the plan had it been told that category was included.

About 15 other states and the District of Columbia are still thrashing out hundreds of millions of dollars of back tax claims with MCI because of this royalty strategy.

…Under Mississippi law, “any person who willfully attempts in any manner to evade or defeat any tax … or assists in the evading of that tax or payment thereof” can be found guilty of a felony.

How it works:

While KPMG’s strategy isn’t uncommon among corporations with lots of units in different states, the accounting firm offered an unusual twist: Under KPMG’s direction, WorldCom treated “foresight of top management” as an intangible asset akin to patents or trademarks. Just as patents might be licensed, WorldCom licensed its management’s insights to its units, which then paid royalties to the parent, deducting such payments as normal business expenses on state income-tax returns.

This lowered state taxes substantially, as the royalties totaled more than $20 billion between 1998 to 2001. The report says that neither KPMG nor WorldCom could adequately explain to the bankruptcy examiner why “management foresight” should be treated as an intangible asset. [emphasis added]

 Why it works:  It won’t lower consolidated income taxes at the Federal level , because the income and expense will offset when the books are consolidated.  The point is greatly reducing or eliminating state income taxes.  It’s a “made up” expense strategy, for the express purpose of state income tax evasion.

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Police knew Brazilian was ‘not bomb risk’

Police officers from the team involved in the fatal shooting of Brazilian Jean Charles de Menezes did not believe he posed ‘an immediate threat’.

It was only when they were joined by armed officers that his threat was deemed so great that he was shot seven times.

Sources said that the surveillance officers wanted to detain de Menezes, but were told to hand over the operation to the firearms team.

Who then shot him seven times in the head while he was already in restraint. “Who will police the police?”

Police may face public inquiry over shooting of Brazilian

Details from the post-mortem examination of the innocent Brazilian shot dead by police suggest Scotland Yard officers lied about the circumstances of the death.

“Suggests”?

Notes presented to the pathologist examining Jean Charles de Menezes, five days after he died, wrongly indicated the electrician was fleeing police shortly before he was shot.

The apparently misleading account could be highly damaging for Scotland Yard if, as claimed, it is proven to have been written by the Metropolitan Police. It would provide evidence the police continued to portray Mr de Menezes in a negative light and provided false information days after his innocence had been established.

The new material, obtained by ITV News, is contained in the post-mortem details of Mr de Menezes dated on 27 July. The note states the suspected bomber was followed by police into Stockwell Tube station in south London and “he vaulted over the ticket barrier, ran down the stairs on the Tube station”.

This account has been directly contradicted by witness statements from police surveillance officers and CCTV footage that suggests the 27-year-old picked up a newspaper at Stockwell Tube station before calmly walking down the escalator

He didn’t run, was not wearing a heavy jacket, and was shot seven times in the head for no reason. Yeah, I think an inquiry is called for. And then those reponsible for executing an innocent man should go to prison.

London police continue deadly force policy

London’s Metropolitan Police said Saturday the department has reviewed the use of deadly force against suspected terrorists after the killing of an innocent man, but has made only minor changes.

 Met chief: I was kept in the dark on Tube killing

Sir Ian Blair, Britain’s most senior police officer, has admitted he did not know his officers had killed an innocent man until a day after Jean Charles de Menezes was shot dead at Stockwell Tube station.

And the rats start to turn on themselves.

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