March 07, 2005
Bankruptcy Blues
The more and more I read about the pending bankruptcy bill, the more and more convinced I am that it is a full-on-mouth (little bit of tongue) kiss to the wealthy and businesses.
The gist of the bill seems to be preventing poor people from being relieved of debt in bankruptcy proceedings, while doing nothing to prevent loopholes available for those who can afford them.
Kevin Drum theorizes the real thrust of the bill, by analyzing the amendments which were defeated. Among them:
- Allowing senior citizens to protect $75,000 of the value of their homes during bankruptcy proceedings.
- A measure focused on helping people who are forced into bankruptcy due to major medical expenses.
- Protecting $150,000 of the value of patients' homes from being seized to pay creditors.
- Forcing credit card companies to disclose how long it would take a consumer to pay off his bill making minimum monthly payments, and what the interest rate would be.
While certainly there are exceptions, the data seems to suggest that the vast amount of personal bankruptcy comes from unforeseen circumstances rather than crazy spending. Medical bills, loss of employment, ect.
I'd be curious to know, if this passes, whether or not someone will move to pull in credit card companies predatory interest rates. The theory behind such huge percentages is that the person is a credit risk. If the people now are not able to get out of paying, is such drastic 'protection' needed?
For more, Josh Marshall has a Special Edition of Talking Points Memo devoted to the Bankruptcy bill .
Comments:Brett said (at March 7, 2005 05:48 AM):
One of the fascinating things about this thing is how thoroughly bipartisan the opposition in the blogosphere has been. I can't seem to find anybody, left or right, who has a good thing to say about the bill.