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BARF - NY Times weighs in
http://www.nytimes.com/2005/03/03/opinion/03thu3.html
The New York Times
March 3, 2005
EDITORIAL
Bankrupt Bankruptcy Bill
With their strengthened majority, Senate Republicans have high hopes of
finally legislating more stringent demands on harried credit-card
consumers
who seek relief through personal bankruptcy. Proponents focus on tales of
materialistic families of mall rats who max out their charge cards and
fecklessly file for bankruptcy to start anew. The truth is far more
complicated - particularly for low- and middle-income families driven to
bankruptcy by catastrophic medical expenses. But the overhaul bill under
debate, long sought by banks and credit card companies, would ratchet
up the
collection powers of an industry that blankets the nation daily with
aggressive offers of consumer credit.
The bill would create a means test that compares a consumer's income and
expenses, thereby changing the current law, which allows consumers to
protect selected assets and escape the full repayment of their debts.
Bankruptcy courts could require bigger repayment plans. While this might
deal with outright schemers, it would only worsen a raft of real-life
problems suffered by single mothers, the elderly and working families who
suffer financial disasters because of emergency medical costs.
The Democrats' attempts to protect them were defeated yesterday. The same
G.O.P.-led majority doomed another worthy amendment that would have
exempted
from the means test military personnel who fell into bankruptcy in their
civilian lives after being called to fight in Iraq and Afghanistan.
Contrast that with the bill's gaping "millionaire's loophole," detailed by
Gretchen Morgenson of The Times. The bill spares this popular gimmick,
which
lets wealthy people file for bankruptcy yet still protect major
resources in
five states that cater to sheltering assets from creditors in special
trusts.
Unamended, the bill is a gift to the credit industry and deserves
defeat. It
needs a fairer balance, including clearer credit information for
consumers,
who are barraged by credit card offers from companies that make little
attempt to ensure that their targets can handle such debt. Consumers are
voters, too. They can see the double standard of a crackdown on ordinary
people by lawmakers who tolerate corporate bankruptcies that cost workers
their jobs, pensions and health benefits.
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