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Bankruptcy Reform Bills: pro or con?(3 posts)

Bankruptcy Reform Bills: pro or con?AllisonHayes
Jul 29, 2002 7:56 AM
With many people facing layoffs, depleted savings, huge losses in the market, Congress is poised to pass bankruptcy reform legislation.

These "reform" bills assume that the rising number of bankruptcies is attributable to scheming, dishonest individuals who use credit with the intention of discharging their repayment responsibilities in bankruptcy. They further assume that VISA and MasterCard should be protected from the consequences of issuing preapproved cards to one and all, without any inquiry into the borrower's ability to repay the offered credit.

"Among the beneficiaries of this legislation is MBNA, the largest issuer of credit cards in the country. MBNA was also the largest corporate contributor to President Bush's 2000 campaign. It also "coincidentally" gave a $447,000 debt-consolidation loan at a favorable interest rate to a crucial House supporter of the bill - four days before he signed on as a lead sponsor.

"What's more unconscionable, though, is that Congress is ignoring the excesses of the banking and credit card industry that are major contributors to the increase in consumer debt and bankruptcy filings in the first place."

To what extent are the credit issuers themselves to blame for creating this situation with easy credit, refinancing and second mortgages?

The concern I have about these reform bills is that the supposed reforms of the bankruptcy system will eliminate an important safety valve: the chance to start over to be productive and self reliant.

No one benefits by having debt ridden, disheartened citizens with no real prospect of ever paying off mountains of debt incurred in part because our consumer society urges instant gratification.

How is bankruptcy handled/viewed in other countries?
Jul 29, 2002 9:58 AM
The only people getting hurt from this are the middle class people and below filing for bankruptcy. The rich people doing this can afford good lawyers to help them wade through the increased red tape and find the intentional loopholes made just for them.
Bail out the big guys but scr$w the little ones.jose_Tex_mex
Jul 29, 2002 2:56 PM
This kills me. When the Airlines, Amtrak, and big businesses are about to go under it's the taxpayer's money that bails them out and gives them free money. According to our policticians - that's just good economic sense.

However, when it comes to single Moms on welfare those same politicians will tell you they are better off working at Burger King.

This bill isn't much different. The individual will get screwed. However, the CEO's who legally robbed the public will continue to make money, even when there Corp's are long gone.

Lesson learned: if you are going to screw up in life financially, do so on such a large scale that the gov't will have to intervene.