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March 11, 2005

Comments

postit

If there is one thing that can bring Repugs and Dems together then it's taking care of their corporate sponsors when the issues under consideration (bankruptcy bill) don't seem to exite public opinion one way or another.

Color me unsurprised on this one. Thanks for the belly laugh tho, this "reaching across the aisle" and "broad bipartisan support for his agenda" stuff, priceless!

Knemon

"We are making a terrible mistake by thinking that we can have it both ways. We have to remember where our base is."

Right ... where is that again?

Has anybody seen the base?
I'm just tryin' to find the base!
(Where's that confounded base?)

Knemon

"We are making a terrible mistake by thinking that we can have it both ways. We have to remember where our base is."

Right ... where is that again?

Has anybody seen the base?
I'm just tryin' to find the base!
(Where's that confounded base?)

Postit - 18/45 = more than 1/3. Not broad support? Support for a crappy thing, sure, but it seems broad to me.

That's the problem with this "unite us" stuff - the things "we" can agree on these days aren't so hot.

Scott Kirwin

Democrats
All your base are belong to us.
- Republicans


JSAllison

I'd think better of this bill were it to address the tendency towards offering up credit to poor risks as it seems that it gives cover to debt issuers from defaulters while imposing no requirement for due diligence on the part of those issuers.

Cousin Dave

JSAllison: We had this discussion already on the previous thread about the bankruptcy reform bill. The answer is, in today's legal climate, the credit card companies must cards to poor risks. If they don't, they'll get sued for redlining. As things stand, though, you are correct; the bill is trying to put a patch on a legal wrong by legalizing a corporate wrong. The right way would be to fix the legal wrong in the first place, but these days it's politically incorrect to suggest that credit cards aren't a Constitutional right.

Duane

I've followed this entire "strangebedfellows" debate with something of a sense of wonder. Based on what I see of the Bill, I simply cannot understand the degree of anguish over it, especially to generate the frantic pleadings to "stop it now!" from so many who are usually strongly in favor of "personal responsibility".

And we have Instapundit and Minute Man agreeing with Kevin Drum? John Cole in league with Kos and The Nation? Are Tom and Glenn, not to mention John Cole, et al, some-time bankruptcy attorneys who don't like the certification requirement, do they have a lot of credit card debt, or are they simply, like the rest of us, tired of the continuous solicitations and offers of easy credit?

The fact is, avoiding the problem is the easiest thing in the world- don't carry balances on credit cards. Period. To read the comments of Instapundit and Minute Man, one would think that the only reason anyone ever declared Chapter 7 was because of credit cards.

Avoiding credit card problems is like losing weight- the easiest formula- take in less than you burn. Is it less fun? Sure. Life isn't "fair". Teddy K has never had to hold a real job, and he has always lived a lot better than I ever have. There will always be parasites, and there will always be fools.

Now, whether or not the bankruptcy Bill becomes law (and it looks to me like it should, on balance), the most common objection is not the specifics of the law, it is that the legislation will somehow reward irresponsible rapacious high risk credit card companies. Fair enough. That is not part of the law, nor should it be. If credit card companies are misbehaving, look at those behaviors and address them in other consumer protection actions, write some special usury rules. But the last two substantive bills on this subject (1978 and 1986) were pro-debtor. It looks to me as though this just balances the scale a bit.

I know way too many people who love their plastic too much, and need to see it as toxic. I like my credit cards too, even though I pretty much hate the companies. But I do one thing that gets even with them- I carry no balances, ever. They make little off of me. Cheapskates' Revenge.

TallDave

Duane,

I agree 100%. People act like bankruptcy has no cost except to credit card companies. The exact opposite is true -- it costs everyone except credit card companies, because they just pass the cost along to consumers.

If credit card companies are charging unreasonable interest rates, let's get the DOJ on their case. The problem with current law is the only winners are the people who don't pay their bills.

Scott Kirwin

TD, Duane
I consider myself a conservative and voted a straight Republican ticket last Fall. I have lots of credit card debt, but I am paying it down quickly. I have excellent credit.

The reason I am against this reform is that it removes a safety net for me. I'm in the IT field and have been laid off a lot over the past couple of years due to outsourcing and wage pressure from H-1bs. I also have a wife with health problems. While I have been able to pay down my debts on time, I realize that a "perfect storm" of a job loss and wife's illness could seriously jeopardize my financial security.

I would most likely avoid bankruptcy even if this happened, but it's nice knowing that the net is there if that "perfect storm" happens. In the meantime I continue paying back the debt as fast as I can because like most people, being indebted to the Credit Card companies is almost (but not quite) as bad as being indebted to the mob.

creepy irish dude

Didya see Gunner Palace. Remember Wilf?

"After serving 410 days in Iraq with the 1st Armored Division, Spc. Stuart Wilf came home to Colorado on Oct. 2. He changed his clothes, borrowed his mother's car, and went out with friends to celebrate.

On the way home, he fell asleep at the wheel and had a head-on collision with a tree. He survived, but since he was newly discharged, he had no health insurance.

"That was a mind-boggling thing to find out the first day he's out of the service," says his mother, Becky Wilf. "His bill was $54,000 just for the hospital. That doesn't include the surgeon."

Stuff happens.

The Kid

The Democrat base = felons + deadbeats + socialists.

You want a safety net? Start saving when you’re young.

Ten years ago I lost my job when the company I worked for went bankrupt through the owners’ stupidity. They all filed too – kept their homes, they did, while I was one of the creditors in line to collect a debt that was never paid. My family and I left the state. I could have filed, but found something else to do. I paid off every creditor, to include the surgical practice that had operated on my kid before the filing.

And if you want to get in on the big payday you believe the credit card companies will have, start a credit card company. It’s been too easy for folks to skip their debts, and there are a few shady bankruptcy attorneys who will have to change their ways. We’ve been paying for their excesses through higher rates for consumer loans, don’t you know.

Old man time

Scott is dead on point. This bill places enormous amounts of risk on the shoulders of people who make the right decisions, which seems like either a poor policy choice, or a "bad" one. There are too many competitive pressures to allow most people to avoid taking on credit card debt. People who have to repay loans for post-secondary eduction who also want to their housing (which the President and Republicans strongly support, and publicly endorse) will probably have to take on massive credit card debt. If they don't, how will they survive, especially if they have children? If they do, and medical emergencies arise, this bill will have them in peonage for years! The children of people who are in that predicament don't deserve second class status. One way that this risk could be mitigated would be for people with college loan debt to avoid buying houses. That would cripple the housing market, which is a major source of wealth. It would also contradict a major principle of the "ownership society" that Republicans tout. We could also have major government grants to people to pay for post-secondary education, but I would strongly doubt that anyone on this board would support that. Or, people could avoid post-secondary education if their parents aren't wealthy enough to pay for it. Anyone who thinks that would be beneficial to our society is crazy.

Paul Zrimsek

There are too many competitive pressures to allow most people to avoid taking on credit card debt.

Better not tell that to all the people who think the problem is "predatory lending"!

The fault line on this issue is clearly not between liberals and conservatives; it's between ants and grasshoppers.

amyc

Um, old man time, your post makes absolutely no sense at all. Student loan payments are quite low, unless you decided to go to Harvard with no financial backing and never bothered to save or work before-hand. Why should anybody feel free to live wildly beyond their means and just walk away from their bills? Ya know, there's lots of quite decent furniture at Salvation Army and Good Will shops. Target and Wal-Mart sell pretty nice clothes. Way too many people think they have the absolute right to live like millionaires no matter what they make. We all know people like that. I honestly don't get all the squalling about this issue.

Cousin Dave

Old man time, I don't follow your reasoning. How does having a student loan to pay off cause one to run up credit card bills? Same with home ownership. Where I live, it's easily possible to buy a first house and have payments that are no higher than rent on a decent apartment.

You talk about people who are just out of school and have debts and decide to have children. Well, why did they decide that? Did they think that they had a God-given right to have children and then expect the government to support them? If these's one thing that pisses me off about today's society, it's that waaaay too many people think that they can have children without any consideration of whether or not they can afford to support said children, and then they just assume that it's society's job to take care of it for them. Saying that some welfare program or other must be enacted "for the children", when it comes from parents of said children, is politically tantamount to using the children as hostages. "Give me a government check, or the kid gets it!"

You talk about loans for "post-secondary education". That basically includes three categories of people: (1) doctors, (2) lawyers, and (3) academics. Well, the last time I checked, groups (1) and (2) were making decent money right out of school. One can make a decent argument that education costs in these fields are far higher than they ought to be, but easy bankruptcy isn't the way to fix it. As for group (3), they tend to be taken care of by the schools themselves.

What I'm saying is, the anti-reform bill side is going to have to come up with a better argument than "poor pitiful me". I've made that argument; I argue that the bill is bad because it solves the wrong problem. But in doing so I'm finding myself in some unpleasant company: the people who salivate at the prospect of taking pitchforks and burning brands to the credit card companies. I've taken masters' level courses and I didn't have to depend on my parents to pay for it, and I didn't run up my credit cards either. I don't hate credit card companies. Perhaps some of their business practices need fixing, but quite a bit of the legal regime that they operate under needs fixing too, and I don't see any of the anti-credit-card fanatics taking their pitchforks to the legislators or courts that created that situation.

The Apologist

Requiring people to make good on at least some of their financial commitments isn't unfair, it's responsible. The objections to this bill just don't make any sense to me. If someone lends you money, you have to pay it back. How is that hard to understand? Credit Card companies are more than willing to give you time and will even cut you a pretty good deal if you reach a point of no return debt-wise. This seems to be some new kind of Marxism gripping the minds of consumers. Call it Nouveau Marxism. It redistributes wealth from the financially responsible to the financially irresponsible.

And I don't understand the objection to readily available credit. This is a good thing in both the macro- and micro- economic sense. When money is too readily available the Fed raises rates, Credit companies do the same thing. If you're still willing to pay the rate then the risk is yours to take, if not, then don't. As far as Credit Card companies and banks making HUGE profits on lending, more power to 'em. It wouldn't make sense for them not to make a lot of money in a business on which the modern industrialized economy is based. If not for ready lending our lives would look very, very different. This seems to be almost entirely reflexive anti-corporatism. I wish more Americans had a grasp of how lending markets work and a basic understanding of market economics, but you would have to fire half the economics teachers in America to start a project like educating Americans on how capitalism actually works.

Workers of the world unite! You have nothing to lose but your economies of scale!

Duane

Creepy Irish Dude- you are absolutely correct that stuff happens. And I don't know a soul who would not recognize the tragedy of that case, nor offer every type of assistance, including bankruptcy protection, in such a situation. But, let me tell you, my kids don't go a day without health insurance. Rates for catastrophic short term policies are dirt cheap- for someone under 30, way under $50 a month with a deductible of $1500 or so, and can be purchasd in a few minutes over the phone, which takes good care of the bulk of that expense experienced by the soldier. There is simply no real excuse for a non-indigent to take on that kind of risk, and we all pay for the indigents, at the emergency rooms.

What we are looking at now in consumer debt is what the law (and philosophers and sociologists) refer to as a "moral hazard"- there is an easy way out, if not a perverse incentive, to run up the bills and take the risks. If these kinds of horror stories are publicized by blogs and other societal organs, people understand that managing risk is not only their civic responsibility but key to ever having a future life that they can enjoy.

Scott, I understand what you are saying- but explain to me why one's election of a certain kind of career is something that should be borne by all through the credit card industry? No one is eliminating bankruptcy, it is merely becoming harder to go through a Chapter 7 discharge if one has an income above the state median where the person lives- the Court still has discretion regarding payment plans, and so on, and there are still meaningful shields for essentials, up to and including, for heaven's sake, private school tuition, a TV, a VCR, a Computer, and so on. This is not 19th century debtor prison even after the reform.

Don't get me wrong- if the horror stories about some of the abuses of credit card phony usurious late fees are true, I fully endorse Senate hearings and federal laws to deal with the South Dakota exceptions. But when we hear the tales, there are lots of things left out that might shed a different light on the situation if we knew it all. And the stories always end up quoting a judge who scolds the credit company- which is an illustration of the fact that the system actually works. If a judge sees something ridiculous, deal with it. If he doesn't, we can all jawbone, file pro bono suits, and so on. Heck, LSC would be eager to take this on.

The fact that we don't hear all this except when it is time to lobby against much-needed bankruptcy reform tells us all we need to know about how widespread the horror stories really are. So, hold hearings- with solid documentation, there will be Senators all over ready to climb the soapbox. But we need verifiable fact, not anecdotal PR.

Susan

All of you are examining the bankruptcy bill from the wrong perspective. If you look at the statistics, you will find that a large percentage of individuals who file for bankruptcy cite medical bills as their largest unpaid debt. Additionally, the percentage of filers who pursue bankruptcy for medical bills has grown significantly over the past few years. [By the way, most of these bankruptcy filers who can't pay their medical bills also have health insurance!]


Therefore, your conclusions regarding the fact that bankruptcy filers are seeking to hide from student loans and credit card debt are inaccurate. The reality is that Congress has chosen the wrong law to reform. Rather than reforming bankruptcy law, Congress should be examining why healthcare costs are skyrocketing and what can be done about.

My first suggestion to Congress in this regard is to stand up to the trial lawyer's lobby and put tort reform on the table. Then, let's talk about reforming bankruptcy laws.

The Apologist

"If you look at the statistics, you will find that a large percentage of individuals who file for bankruptcy cite medical bills as their largest unpaid debt. Additionally, the percentage of filers who pursue bankruptcy for medical bills has grown significantly over the past few years." - Susan

These claims are greatly exaggerated.

Jason Van Steenwyk

My concern is the law of unintended consequences. For example, if you build in protections for people who run up medical-related debt, sure, it's not their fault. But if it's too easy to default on medical-related debt, then care providers will simply restrict access to credit.

So the same population gets hurt, either way. But some people may die, or suffer irreversible health problems for lack of access to care due to lack of credit, or treatments delayed so long they become life threatening and some doctor takes pity on him and performs the service for free.

I don't know what the quantities will be. But the % of people who apply for credit to treat potentially life-threatening problems can be quantified. And probably has been.

Jason

Forbes

Uh, Jason, I think your normally level headed commentary is a little off track. You cannot be denied medical care due to lack of ability to pay, in the US. You may not have the same access to care--as most uninsured must access the system through ERs. And I will grant you that some--many even--will plug holes in their coverage through the use of credit cards, but lack of medical care conflated with a lack of credit strikes me as off the mark. The Apologist cites an article on NRO that adresses some of this medical-credit intersection.

Cheers.

JOJO

I was very righteous until I was brought to my knees by illness. No supports, no assistance. Insurance was a drop in the bucket toward the expenses. Income stopped and eventually the money ran out.
Blessings to all of you who have so much control over your lives. You have not lived long enough or you have been very fortunate not to know the horror of being completely out of control.
By the way, control is an illusion.
Just wait. Humility can only come from being there. Imagine not having the health to move away or get a second job or even have a cogent thought, let alone the energy to implement it. I know, you cannot imagine this. Very few can imagine this.In reality it is unimagineable. Like so many other horrible things.
If you really have not been there then you can be "holier than thou" and much like the concrete thinking of a 16 yr. old.
Teens have it all figured out because they have no life experience.
I paid my way. graduated in '77 with time bomb ticking. Paid my loans until 1993. Great pride in this. All on my own!!!
When the lights went out there was no one.
Not being a millionaire the money did eventually run out.
You, any of you, especially those of you who still believe that you can be in control no matter what; will have a rude awakening when you the day comes when you realize that you are truly powerless.
Until that day. Keep your self-righteous, self-congratulatory, superior attitudes to yourself.
If that day does not come, good for you. I do not wish it on anyone. You will still be ignorant of what others endure. (I do, however, prefer talking to someone who has been there, they know what I know.)
Do you really think you know? If so, do you really think you represent the American working man? Maybe you are special in these ways. Need a pat on the back for being special? "Virtue is it's own reward." You got it. More power to you. No joke. Some folks do better than others. So speak for yourself. Do not pretend to know me or my situation.
JOJO

leesus

i actually support the bill. I dont think it should be easy to file for bankruptcy, actually i dont support bankruptcy at all.

If people get into debt, why should the creditors get stuck with the bill? As a landolord, i know exactly how this happens. SOmebody whith good credit and references just "goes stupid" and stops paying rent, utilities, etc...

After 6 months of washington eviction proceedings, i will eventually be legally allowed to have them removed. The court will also give me a judgement against them for the unpaid rent and or damges.

And allways, slightly before these people come into money, whether it be a cor accident, getting a job, or even something as small as a tax return, they file bankruptcy.

And I'm screwed.

Its not just faceless corporations that this will help, its me that finnaly gets alitlle protection. its just they are the only ones out there with the connections and influence to make this happen.

I am sick of personally financing other people's "fresh starts." I sold my car once to pay for some idiots "fresh start."

I have little sympathy. Pay your bills.
-lee
+++


TM

"We are making a terrible mistake by thinking that we can have it both ways. We have to remember where our base is."

The base, Senator, is in Tampa, actively working on voter outreach.

Duane

Jojo, my heart goes out to you, as it does to all who suffer such misfortune. Where, pray tell, does anyone who favors bankruptcy reform ever suggest that bankruptcy should be outlawed for truly needy cases? What we want is for those undeniable deadbeats who take care advantage of the system to be weeded out so that people who have real problems can be taken care of instead of having all the system's resources sucked out by irresponsible opportunists.

For a parallel, look at tort reform as it applies to asbestos or vaccine production (http://mnkurmudge.blogspot.com/2004_10_01_mnkurmudge_archive.html) and you see the consequences of not checking and balancing the system when it goes out of whack. There are stadiums full of plaintiffs attorneys advertising for any clients who have ever laid eyes on asbestos in their workplaces filing claims with no measurable damage while real asbestosis or mesothelioma sufferers fight to get a place in line before the Johns-Manville bankruptcy.

Clean things up. And there will be room for those who really have problems that need bankruptcy to resolve.

Hei Lun Chan

Democrats
All your base are belong to us.
- Republicans

Damn, you beat me to that by about 12 hours.

Californio

query: If we all pay more because of bankruptcy filers, this "reform" will naturally lead to a decrease in rates - correct? Even if rates flucuate slightly up or down, lenders will see their losses greatly reduced due to fewer persons qualifying for chapter 7 relief.

I predict that lenders will not change their ways. They will bank more profits.

I predict lenders will get even sloppier in their practices - for they will be rewarded for every loan made - irrespective of risk.

I predict gullible types will trumpet this as embracing "personal responsibility" when in fact it is a rather naked example of a special interest spending puny cash on legislation to reap hundred/thousands/millions on the back end from said legislation.

I predict that this law will be in effect just as the economy turns and thousands (millions) of persons who before could get relief are now denied

What?

Politically i would be best classified as a free trading, pro-business, neo-con, religious right wing conservative intellectual. I can't speak specifically about the merits of this bill cause I don't know much about it.

I do know that I have recently filed for and received a discharge of debts under Chapter 7. While I am not proud of having done so and fully acknowlege pure financial stupidity and poor decision making on my part in the process, still I don't feel guilty in the least for having pursued bankruptcy protection because of the circumstances, my worldview, and intellecual nature. To some it may seem odd but I really don't "credit" myself as guilty anymore precisely because of my religious and economic/political beliefs. Walk a mile in my shoes and see where they lead you.

I want to answer the Leesus question as forthrightly as I can.

"If people get into debt, why should the creditors get stuck with the bill?"

Simply because a "creditor" by another name is an investor who is assuming some risk to pursue profit. Money and people are a volitile combination and things don't always turn out like we want or expect and that's life; be thankful for what you have, don't envy or covet and be willing to forgive those who owe you debts if necessary because if you will not forgive them it would be better that you should not have gone into business at all. Getting stuck with the bill and paying it is a righteous thing.

At the end of the day after my bankruptcy I was better off and the credit card companies and their employees while not "better off" than when they had me on the hook are still far better off financially than me, are plenty solvant and are reaping healthy profits. They have better financial sense than me, so more power to em!

Leesus writes this:
"I am sick of personally financing other people's "fresh starts." I sold my car once to pay for some idiots "fresh start."

I have little sympathy. Pay your bills."

If you have no sympathy for the destitute why should the destitute or anyone for that matter have any sympathy for you? The only real sympathy your gonna receive for your attitude is the sympathy of the devil and I'm not saying that to be snippy.

No one likes getting ripped off but between the choice of that or being heavily saddled by a pile of debt, I know which option I prefer and that from experience of both? Having your stuff stolen or being betrayed sucks, but having a conscience and some pride yet knowing that you are a financial screw up and own less than nothing despite working hard and trying to play by the rules is far worse.

Some people have a midas touch and in some hands gold turns to dust. Both thought they were cursed (because they were)

Duane

All the new bill has done is shifted the burden a little bit in a necessary direction- making it harder for middle class people with income and assets to duck debt, whatever the cause, by filing bankruptcy. It also adds burden to bankruptcy attorneys to be more responsible about ensuring that they verify the truth in the filings in some way other than taking the filer's assurances at face value. How on earth is that unreasonable? Because it adds some risk for the bankruptcy mills that advertise $99 filings in the newspapers and crank out paper by low grade paralegals roughly the way mortgage procesors do?

None of this means that people who really do not have means cannot sustain a filing. "What", above, received a Chapter 7 discharge. His/her case was probably legitimate. It probably would be sustained as well under the new law. If he/she earns $50,000 a year and owns a home, there would have been a required intermediate step of credit counseling and negotiation to set up consolidations and payment plans first. Who objects to that? What debtor with a moral compass has a problem with that? If things are really bad, that step will quickly be passed and the bankruptcy will proceed. If the person has assets, there may be a repayment plan, yes. But only after the house, TV, VCR, computer, and living expenses for the family come off the top.

When my wife and I were starting out, I made zilch, and we had two small children. I worked three evenings a week at Shakey's pizza to make ends meet. We had an old beat up car that we held together with duct tape and clothes hangers. I car-pooled to work. Our home was small. We didn't use credit cards- because we knew that if we didn't have the money now, we wouldn't be likely to have it in a month, so that meant don't spend. Go to the library, not the movies.

And if you are willing to live that way, I guarantee that you will pass through a necessary bankruptcy caused by unforeseen events with no hiccups.

Stuff happens. The system is pretty gentle when that occurs. If it isn't there are investigative reporters all over happy to sell the story.

And, one more time, if it turns out that, based on hard data and fact (unlike the phony Harvard study about medical bills supposedly causing bankruptcies), that a sizable number of bankruptcy filings are caused by rapacious credit card companies charging usurious interest disguised as "fees" to run up balances despite earnest and honest efforts of people to pay them off, the information will come out and there will be action to address THOSE abuses. That has nothing to do with the ease or difficulty of filing bankruptcy, which is aimed at consumer behavior.

Any substantive Bill that gets more than 70 votes in this US Senate is so obviously mainstream that our debates are ridiculous (remember that regarding the thankfully dead Kyoto Protocol).

Tracy

Duane,
As 'WHAT' stated, credit card companies charge interest and loan money as an investment. If they lose, why does Congress protect them? What about other investors that lose? Do they get to have laws made for them that will re-imburse their losses?

You are unlikely to accept ANY 'facts' that do not agree with your belief that anyone that files bankruptcy is a dead-beat, or worse, someone that should not have used credit in the first place. I have worked in a bankruptcy attorney's office for 7 years. Of the almost 1000 people that have come to our office, two were sent home to pay their bills. Of those that filed chapter 7, about 55%, none could have continued to live under the debt burden. Of the 45% that filed Chapter 13...yes, many do, about a third were below the median income limit. This bill is bad, but it will do exactly what it was intended to do, reduce bankruptcy filings. Our guess, 90% reduction in the first full year. But that will not mean 90% will be in better financial condition.

Tracy
our doomsday clock is at www.cazelaw.com

amyc

How pathetic

"At the end of the day after my bankruptcy I was better off and the credit card companies and their employees while not "better off" than when they had me on the hook are still far better off financially than me, are plenty solvant and are reaping healthy profits. They have better financial sense than me, so more power to em!"

"I do know that I have recently filed for and received a discharge of debts under Chapter 7. While I am not proud of having done so and fully acknowlege pure financial stupidity and poor decision making on my part in the process, still I don't feel guilty in the least for having pursued bankruptcy protection"

"Simply because a "creditor" by another name is an investor who is assuming some risk to pursue profit. Money and people are a volitile combination and things don't always turn out like we want or expect and that's life; be thankful for what you have, don't envy or covet and be willing to forgive those who owe you debts if necessary because if you will not forgive them it would be better that you should not have gone into business at all. Getting stuck with the bill and paying it is a righteous thing."

What a sick, twisted use of religious psychobabble to justify your irresponsibility. Pity the fools you run across and scam again.

Duane

Tracy, how can you know what "facts" I am likely or unlikely to accept? And you provide very few facts, nothing relevant to the specific question at issue- some raw data estimates from your prior employment, but nothing regarding the topic. Once more, the question I asked is, how many of the increased cases of middle-class bankruptcies are caused- not exacerbated- but CAUSED by usurious fees charged by credit providers? Give me numbers, not hyperbole.

I have repeatedly stated that credit card loan-sharking appears to me to be a problem, based on the numbers of card solicitations I get every day. If someone who can't manage money or discipline himself or herself to control buying grabs on to a bunch of these offers, there will be trouble. I don't see how the answer to that individual problem, exacerbated by ugly business practices, is to penalize society as a whole and make bankruptcy an easier way out than paying back what you borrow.

Irresponsible granting of credit is not a problem regarding bankruptcy- it is probably one of many factors tied to a dramatic increase in filings, but it is a business practice issue that needs to be addressed directly in a different forum. And I favor addressing it, as I have stated here on the MinuteMan's other post from Saturday at 7:01 PM: http://justoneminute.typepad.com/main/2005/03/make_the_shark_.html#comments.

My point, lifted from there, to save you a jump: "To address the issue of abuses by creditors, which means the bad-behaving credit card companies who shovel out the credit then charge usurious hidden fees by a variety of names, do something that directly takes care of that problem- don't indirectly try to pressure MBNA or Capital One by generating large numbers of bankruptcies. People need to start dealing with the consequences of uncontrolled fiscal management at some point, and even though some will never get it, some will. And that helps......
"..... In the business world, a merchant seller automatically grants an "implied warranty of merchantability" that the item is fit for its intended use when he sells a product. He can disclaim the warranty- but only by PROMINENTLY displaying the disclaimer in a way that no consumer could miss. In other types of contracts, limitation of liability provisions are entered in bold-face and upper case letters so that they cannot be missed. Here's the key: if you fail to show your disclaimers prominently enough, you lose the tort action. The result is that merchants always plaster their disclaimers out there so boldly that you cannot possibly miss them.

"The same point can be applied to credit. If the problem with bankruptcies really IS hidden rapacious fees on credit cards, rather than uncontrolled spending while paying the monthly minimum (I've read a lot of hyperbole, and seen no data on this point, while E. Warren's phony medical cost stats are just that), the first time a person innocently gets suckered into those 30% fees, file suit. The judge can write an opinion finding that the lack of adequate warning was the cause of the fee run-up, and impose "strict credit liability" on the company.

"The industry fee disclosure practices would change in a tearing hurry."
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Bankruptcy is a consumer issue, not a provider issue. No one forces you to use a credit card, and they cannot charge you a nickel in interest if you pay the blasted bill within 25 days of being billed. The bankruptcy law should address proper management of debt, not how the debt was acquired.

If 100% of bankruptcies were the clear proximate result of 30% late fees on credit cards where innocent frugal citizens had given themselves plastic surgery (cutting off their credit cards) and yet, despite making regular and substantive payments saw the balances increasing rather than declining, we would conclude two things: 1) the godfather runs the credit card business, and 2) we need to put him out of business. What would we do? We would take care of the loan shark, and in the process, discharge the extortion debts. Either way, you address that by looking at the credit card company practices in and of themselves- it is a distraction from the real issue to disingenuously kill bankruptcy reform when you just want to screw MBNA; they may deserve to be screwed- do it honestly.

We do not have 74 US Senators, from both sides of the aisle, all on the take from a few Delaware-based financial institutions, folks. Get real.

Break down the causes of the explosion in middle class bankruptcies- part easy credit, part hard luck reverses, a small piece medical problems, part unwise financial management. If there are externalities that are substantially causative for any of them, address them.

Expose the credit card companies- devote 15 minutes on "60 Minutes" to the subject every week for 6 months- set up blogs devoted to "criminalusury.com" loaded with verifiable anecdotes, and collect donations to target senators to support legislation aimed at sunlight full disclosure of late fees, in plain English words and type that is bold and larger than the 4 point size in the statements on the invloices. If there are medical situations where someone couldn't get catastrophic medical insurance (NOT refused to buy it because he preferred to spend the money on a car as is the case among many young people today), address that.

But don't give me this caterwauling over a law that primarily requires middle class people with incomes above the median to explore all options for partial repayment before having all debts discharged. This is not a debtors prison bill.

Even if you DO hate the credit card companies.

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