Friday, October 21, 2005

Morally Bankrupt: The New Bankruptcy Bill

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which was passed by the Senate in March and went into effect on Monday, October 17, 2005, is worthy of comment for a couple of reasons. The bill limits the law from protecting individuals when financial hardships occur, giving power to the credit card corporations to insist on collection.

First of all, it pertains to Chapter 7 and Chapter 13 bankruptcies, both of which are filed by individuals for different reasons. Basically, the way I understand it is that a Chapter 7 bankruptcy allows the debtor's assets to be sold, with the proceeds going to pay off the debt. Any remaining debt that can't be paid off will be forgiven. A Chapter 13 bankruptcy is filed by people who want to pay off their debts over time ~ I think I read that the time frame is three to five years. The key word here is that both of these types of bankruptcies are filed by individuals, not corporations.

Interestingly enough, Chapter 11 bankruptcies are not included in this new bill. "Why's that so interesting?" you say. Because Chapter 11 bankruptcies are mostly used by businesses for reorganization and restructuring of their debt load.

This law was passed as a gift to corporations ~ especially the credit card corporations. "F--- the common man and protect the corporations" ~ that's what the bankruptcy bill should be named. It's no coincidence that MBNA was the fifth largest contributer to the Bush campaigns of 2000 and 2004. The bill was designed under the frame that "too many people" are abusing bankruptcy laws. However, month after month, the bankruptcies that touch our lives the most are those that we hear about in the daily news ~ Delphi, the airlines, and on and on. Job loss, loss of health care, loss of pension, and loss of self-esteem all occur for the individuals who work for the companies which file bankruptcy. In many cases, the individuals have no recourse but to file bankruptcy, while the corporations get a free pass, continuing to run their financial situations amok. Punish the common man for being in the midst of financial strife, but let the corporations play. Most personal bankruptcies result from a medical crisis without adequate health insurance or unforeseen job loss. These are not circumstances that people intentionally bring on themselves. Most business bankruptcies result from a failure of leadership, yet the leaders end up with golden parachutes.

One of the provisions of the bankruptcy bill that I find troubling is that it mandates credit counseling for individuals who file for bankruptcy. They have to pay for the counseling ~ again, more money lining the pockets of the already shady credit industry. So not only can the credit card companies demand complete payment from an individual who files for bankruptcy, they also stick it to you by charging you a fee to tell you how you may better manage your money.

I used to believe that our government was by the people, for the people. But really, these days, it's by the corporations for the corporations. This bill is a sterling example of how the people are no longer protected by the laws of our government. And that's a damned shame.


Blogger Maroon303 said...

Amen to that sista.....

It is just ri-fucking-diculous...

12:47 PM  
Anonymous bbbustard said...

So True - At the cousin of bustardblog, is cdbustard, a list of annotated links to the right. More than once I've accused a right wing nut of being a Bushie - and they've contacted me and objected. They say that Bush is no conservative and is in fact a corporatist.

6:15 PM  
Anonymous TheaLogie said...

A contributor to today's NYT opeds noted that the present bankruptcy bill actually works against the creditors in the long term.

12:08 PM  

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