Bankruptcy Reform
President Bush this week signed legislation that
reforms the current bankruptcy system. Apparently, too many people were filing
for bankruptcy, and the credit card companies were getting
stiffed.
In defense of those credit
card companies, the bankruptcy system probably was abused all too easily. If I
were a congressman or a senator, I probably would have even been willing to vote
for it, but not in its present form.
To
my perception, there were two amendments that should have been tagged onto this
bill, that, in their absence, make this bill too much of a giveaway to companies
that loan money to individuals or otherwise are large-scale creditors and
doesn't do enough to protect those who truly need bankruptcy
protections.
The first amendment that
should have been on this bill would have offered some degree of minimal
protection for those whose medical bills grew too large, too quickly, and had no
reasonable means of paying for them. Someone who had the misfortune of getting
sick, or having a family member get sick, when they lose their income, their
insurance benefits, and, not long thereafter, their money, they need more
protections than this bill provides for. If we are not going to allow for some
degree of universal health care in this country, bankruptcy protections are more
than needed.
Second, and no less
important, is a reining in of the marketing practices of the credit card
companies. I have written before about how unnecessary the marketing of credit
cards really is (when you consider the sheer number of ways one can obtain a
credit card). Is it not possible that the credit card companies are losing a
lot of money through personal bankruptcies because they issued too many credit
cards?
When I receive a credit card
solicitation in the mail, I send them a canned letter in response, thanking them
for their generous offer. This letter offers a tongue-in-cheek thanks for the
assurance that I am not the victim of identity theft (thus saving me the need to
check my own credit rating), and a sarcastic thanks for providing me with
endless confetti for my next party.
When I receive a telemarketing call
offering me a new credit card, I tell the person at the other end of the phone
that I would love to take out one of their cards, as long as the credit limit is
at least three times my annual income (and I will gladly answer any questions
with regard to my actual income, being willing to provide photocopies of my last
two or three years' worth of W-2's if necessary). Somehow they never seem to
follow through on my willingness to accept their
offer.
Is there room for abuse of the
bankruptcy system, and should that abuse be curtailed? Absolutely! But in
weeding out the bad people, let's not overlook those who got them there in the
first place, and let's not overlook those who are more victims than
victimizers.
Posted: Thu - April 21, 2005 at 11:00 PM