[Mb-civic] Bankruptcy Bill is Congress' Shame

[ean at sbcglobal.net]

(EAN members--there will be a letter in upcoming March packet on this 
legislation.  If you're not an EAN member and wanna send it let me know.)

http://www.commondreams.org/views05/0307-25.htm

Published on Monday, March 7, 2005 by the Madison Capital Times / WI
Bankruptcy Bill is Congress' Shame
by Dave Zweifel
 

The Republican-dominated Congress is on the verge of changing the nation's 
bankruptcy laws to make it easier for the hugely profitable credit card 
companies to get their money back and more at the expense of the nation's 
poor.

The big banking interests have been trying - and failing - for the past four 
congressional sessions to make it more difficult for financially beleaguered 
Americans to file for bankruptcy, tipping the balance in favor of the nation's big 
financial interests.

This time, though, the legislation is all but assured of passage in both houses, 
thanks to gains made by Republicans in the 2004 elections. Wisconsin is 
playing a role in the debate. Rep. James Sensenbrenner, who represents silk-
stocking suburban Milwaukee and has long been a toady of special business 
interests, not surprisingly is leading the charge in the House.

The "reform" is ostensibly needed to counter those who are abusing the 
current system by running up large debts and then wiping them out, leaving 
banks and credit card companies high and dry.

But the extent of those abuses is open to debate. It is known, however, that 
one of the leading causes of bankruptcy, especially among Americans over 50, 
has long been devastating medical bills not covered by insurance.

This Republican-dominated Congress would rather pass legislation favoring 
the wealthy and powerful than tackle the nation's shameful health care system 
that has left 42 million Americans without any medical coverage.

The "reform" package would require bankruptcy filers to pass a means test. If 
their incomes are above a certain poverty-line linked level, they wouldn't be 
able to file under Chapter 7, where all but a few debts are wiped out. Rather, 
they would be required to file under Chapter 13, which requires specific 
payments to creditors over a set number of years.

As usual, the bankruptcy law rewrite is aimed only at the little guy. There is 
absolutely no attempt to rein in the credit card companies that shower every 
American household with dozens of enticing credit card offers every month, 
whether they are poor credit risks or college students with no income to repay 
bills.

"What the credit card industry has been doing the last 10 years is akin to 
sending free samples of alcohol to alcoholics," says Travis Plunkett, legislative 
director for the Consumer Federation of America.

All segments of society have been affected. Veterans, for example, are being 
counseled by American Legion Magazine this month about the "debt trap" from 
too much credit card use.

"Paying the minimum payment every time on a $5,000 credit card debt at 21 
percent interest will require 1,040 payments to clear the debt," the article 
points out. "Beyond the $5,000 principal balance, $32,198.66 in interest will be 
paid."

Now that's the kind of abuse that our lawmakers ought to be concerned about.

Instead, representatives like James Sensenbrenner work overtime to punish 
some poor bloke down on his or her luck so that the moneyed interests, the 
ones who grease their palms, can collect even more.

Copyright 2005 The Capital Times

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