Tuesday, January 17, 2006

The Indentured Servitude Act Of 2005

Better known as the new bankruptcy law, has had little impact in the number of people who have to file bankruptcy.

A toughened bankruptcy law requiring debtors to seek credit counseling is doing to little to curb the number of consumers filing for bankruptcy


It makes one wonder why.

While the new law, which took effect late last year, requires debtors to seek counseling in hopes that it will steer them toward repayment plans instead of bankruptcy court, counseling agencies said most debtors are too far in financial trouble to qualify for a debt-management plan.


No kidding, that is exactly why they are talking about bankruptcy. For the vast majority of people this is not a step taken lightly, but out of desperation. By an overwhelming majority, families are driven in bankruptcy not by unfettered spending on dinners out, and new gadgets, but by lost jobs, medical disasters, natural disasters or other calamities outside the control of the family, and counseling does nothing to help in these case.

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4 comments:

Dean P said...

No kidding. This is the sort of outrageous assault on the poor by Republicans that we've come to expect - dressing it up as a "culture of responsibility" while ignoring that the overwhelming majority of personal bankruptcies come from medical bills.

And at the same time, the cut medical assistance for the poorest, cut social security, cut welfare, but don't restrain credit card companies who offer these desperate people credit.

You're right - people don't choose bankruptcy lightly. People don't choose to go on welfare lightly. Republicans conjure up these lazy good for nothings who thrive off welfare and who declare bankruptcy surrounded by HDTVs and stereos and luxury goods, while ignoring that the overwhelming majority of people on welfare and who declare bankruptcy look nothing like that.

Lynne said...

Damn right. I had to go the bankruptcy route after (a) my husband lost his job and (b) he was diagnosed with terminal lung cancer. Even though he was under my insurance (State of SC Blue Cross) I was still left with over $30k in medical bills when he died.
I don't even make that much in a year. This entire bankruptcy bill absolutely INFURIATES ME.
And where is the responsibility on the part of the banks, who loan vast sums to anyone and everyone?

Patrick said...

You both are right this law is screwed up and must be removed

Bill said...

I'm kind of late getting here to comment, but overwhelming medical bills have always been and still are the number one reason folks declare bankruptcy. The fact that their credit cards are maxed out is only a result of their trying to keep their heads above water any way they can.

In the meantime, government promises that were made, and which people relied on to plan their lives and retirements, regarding Social Security and Medicare are being broken left and right because politicians don't have the moral backbone to behave responsibility.

While I think it's beyond doubt that Republicans have been most guilty of looting the trust funds for these programs, the Democrats can't claim innocence. Many have been complicit in these injustices. We ourselves become complicit if we don't hold every responsible person's feet to the fire.

Jim Wallis has much to say about this in "God's Politics." God bless you for bringing up the issue here.