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Why does American democracy have to be like this?

I haven't written much about the bankruptcy bill up until now, primarily because I had several different contradictory impulses regarding it. The final vote count is interesting, given that almost no one seemed very enthusiastic about the damned thing, at least publicly.

I'm willing to believe that it's not quite the unmitigated disaster some critics are portraying it as, but that's scant comfort, frankly. When a bill passes by such an overwhelming, bipartisan majority, you'd like to be able to say something about it besides, "Well, maybe it doesn't suck that badly...."

One of the reasons I didn't come out swinging early on is that I honestly believe it is too easy these days for some people simply to walk away from debt they have recklessly accrued, leaving the rest of us to pick up the tab. I know this is not the case with all bankruptcies, but I've seen it happen often enough firsthand that I think it's a legitimate problem.

But is this bill an appropriate solution? No, I don't think so. And why not? What
stopped our lawmakers from crafting a compromise bill that could rein in bankruptcy abuses in a fairer, more even-handed way? I think a less ham-fisted approach could have garnered widespread popular support. Just for starters, why not something like this?

  • Make it a bit less easy to hide assets in most personal bankruptcies.
  • Exempt bankruptcies which were wholly or largely due to medical expenses.
  • Take measures to rein in predatory lending practices.
  • Force banks and other lending agencies to prominently disclose all the "gotchas" they currently bury under mountains of fine print.

Really, why not? Such a bill would redress some genuine problems on both sides, while removing some of the more objectionable aspects of the current legislation. Wouldn't that be better for all involved? Unless, of course, you're a deadbeat or Louie the Loanshark?

Congressmen make plenty of money and have sizeable staffs and resources at their disposal. There's no excuse for the fact that a third-rate blogger can toss off superior legislation from the top of his head in 5 minutes while sitting on the couch drinking beer on a Sunday afternoon.


I agree. I have worked with emotionally/physically/verbally abused women. Often, the husbands they are with are very controlling and as a result control the finances in their marriage. So often the first thing these women have to do upon leaving their husband is to commit bankruptcy because the creditors will go after either until the debts have been discharged. Some of these women are so poor that would qualify for bankruptcy even under the new law. Others are in a gray area. However, even if you do get a job for say $35K, that aint going to help if your ex-husband got $80K in debt and is still running up the tab. With means testing, however, that women is not poor so she is going to have to go through counseling and chapter 13 and probably pay a whole lot of lawyer fees.

There has to be some kind of arbitration procedure that deals with the circumstance of the bankruptcy -- because there are people who are completely surprised by medical costs. It is not necessarily bad planning when you thought your insurance would pay the $40K but didn't.

Also, like you said, this bill doesn't deal with credit card company abuses. These include jacking up rates after just one late fee. I am not for total regulation, but going up from 5% to 25% is rediculous. (And some companies have been caught purposely processing the mail slowly so there would be more late fees.) The other thing that consumers don't know about is that most of these "counseling" services are financed by the credit card companies and therefore do not always have the interests of the client in mind.

What galls me, most of all, is that the credit card companies have been posting record profits. So the idea that the consumer is going to benefit from reduced costs does not seem to be supported, in my view. The credit card companies are also becoming more and more reckless in their offering credit to bad risks. It used to be that you had to pay back a decent percentage each month of the amount you owe. Now it is only $20 because studies show that they can create a false sense of security and get people deeper into debt if they don't raise the minimum based on how much they owe.

It is not that people are not responsible for the money they owe. Lenders, however, should hold some responsibility as well. If I lent $10 to a crack addict, would I gain much sympathy if I started complaining about my $10?

This bill makes even the most honest debtors far more responsible and gives an increasingly irresponsible credit card industry less responsibility.

That is why it is to me a terrible bill.

Perhaps because this bill was more about keeping promised made to campaign contributors than it was about doing anything about a problem.

You're right -- it wouldn't have been difficult to carve out exceptions for medical expenses, for people whose spouses charge all the credit cards up to the max and then split, for people out of work, etc.

But since this bill is all about making sure credit card companies get as much money off of people as they can, NOT about "personal responsibility", the Republicans had no motivation to do anything about it. Besides, it's a good way to return us to a feudal society that much sooner.

I kind of like the idea of using those postage-paid envelopes that come with credit card solicitations to send nasty letters back to their issuers.

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