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February 14, 2005
Tighter Bankruptcy Laws
Republican leaders in Congress began clearing the way yesterday for swift passage of legislation backed by the credit card industry and opposed by consumer groups that would make it harder for consumers to wipe out debt through bankruptcy.

Washington Post

Hey, who better to look out for your financial well-being than credit card company lobbyists? They only want what's best for the country, after all.

Now, sure, I'm all for personal responsibility, and if you ran up too much credit card debt buying big screen TVs and getting cash advances in Vegas, well, that was stupid.

But what they're trying to do here is make it much harder for people to file Chapter 7 bankruptcy, which wipes clean your debt, never to be repaid. Obviously, it's already pretty hard to get this kind of protection and it can be overruled by a court if they think the law is being abused. In addition, if you file Chapter 7, you have to give up most of your assets and "other essentials." In other words, there are already protections in place.

Republicans and lobbyists like to pretend that this is just a big free ride and all manner of people are using it as a free pass. Of course that's not even close to true. You know some people, right? Do you know anyone who is just itching to declare bankruptcy?

No, many people who are forced into bankruptcy are regular people who fall on hard times, most often as a result of medical bills. So the proposed solution isn't to construct a more equitable health care system, but to make it harder to find relief.

Studies by the nonpartisan American Bankruptcy Institute show that about 3 percent of the people who file Chapter 7 could actually afford to repay even a portion of their debt. The credit card company lobbyists say it's more like 10 percent. They also claim to be remotely credible.

What they don't dispute is that the companies they represent are experiencing booming profits and continue to offer credit to just about anyone, often specifically targeting those who can least afford it and who least understand how to use it responsibly.

For more on the credit card industry, I recommend Frontline's "Secret History of the Credit Card". You can watch the whole episode online, but at the very least everyone should read Eight Things Every Credit Card User Should Know.

Example: Did you know that you rates can be raised if you're late on payments to anyone, not only to the lender in question? So, if you miss a car payment, your credit card company can raise you interest rate, even though they have absolutely nothing to do with your car financing.

Comments

Previous Comments

You commy, your just looking for a free ride like all democratic liberels but theres no such thing as a free lunch and if you had to pull yourself up by you're bootstraps you'd of learned that by now. This country was built to last, and nothing your saying is anything to a patriot!

Nice pretend stupidity! A bit over the top for my taste - I would have gone for more believable spelling mistakes - but still, not bad.

468024: Hey, does anyone know where I can find a list of gas stations with low prices in my area?