February 25, 2006

Congress's Disgraceful Bankruptcy Law Punishing Good Americans

The Congressional do-gooders who passed the punitive and contemptible bankruptcy law last year probably will not care that all signs are now pointing to how the law is actually serving to punish good Americans who are in trouble through no fault of their own.

Somehow those feckless Senators and Representatives thought that millions of ne'er-do-well Americans were jacking up huge debts by running amok with credit cards and then capriciously trying to duck their responsibilities by getting out of paying for their immaturity and immorality. Those Senators and Representatives thought it high time that all those people be punished for their bad behavior. While it is true that there are some people who behave badly with their money and look for the easy way out, they really are in a small minority.

Despite many warnings about how punitive the law would turn out to be, it was passed and now Americans who are in trouble are paying for it. They are being punished because they have lost their jobs or suffered business reversals, had catatastrophic medical events, or had a spouse die. According to a recent study, almost 80% of Americans who are filing for bankruptcy are suffering because of one or more of those adverse developments in their lives. The United States Congress has made the lives of those Americans even more miserable.

Tha National Association of Consumer Bankruptcy Attorneys, which conducted the study by surveying 61,000 potential bankruptcy filers at six national credit counseling agencies, says:

(T)he credit counseling requirement under the new law, designed to steer debtors who could repay their debts into a debt management plan [DMP], simply imposes new costs and time burdens on individuals who can ill afford either – and clearly are not the people for whom a DMP is feasible...

The study found that only 3% of those people who are potential filers actually have the means to pay back even some of their debts.

Will any of those who voted for the banckruptcy law even notice? Does it matter at all to any of them that Americans who lose their jobs, have medical crises, or lose a spouse need our help, not a slap in the face?

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