Making Tapeworms Look Good by Comparison
The bankruptcy bill is an attempt to prevent people from filing Chapter 7 bankruptcy which gives people a clean slate and make them file under Chapter 13, which requires continued payments to the credit card companies. In order to qualify for Chapter 7, Americans would be forced to complete a costly and bureaucratic means test. This additional red tape is almost completely unnecessary. According to a study commissioned by the nonpartisan American Bankruptcy Institute, 96.4 percent of people who file Chapter 7 can't afford to pay anything more. The real intent of the legislation is not to prevent people from abusing the system but to make it so burdensome to become eligible for Chapter 7 that people who would qualify can't afford it....
Chapter 13 amounts to a form of debt peonage. The bankrupt is placed under the supervision of a trustee representing his creditors; they monitor his income, determine the bare minimum he needs to subsist on, and take everything else for the creditors. Since he is not allowed any savings, the bankrupt is literally a paycheck away from homelessness.
The article continues:
The surge in bankruptcies has been brought on, in no small part, by the credit industry's own predatory lending practices. In 2001, credit card companies sent 5 billion solicitations for credit to American homes. Between 1993 and 2000, the industry increased credit extended to the public from $777 billion to almost $3 trillion. Once the consumer accepts, the companies are allowed to change their interest rates at any time for any reason. Many follow a practice of "universal default" which means any drop in your credit score which can be triggered by missing a single payment on your electric bill can lead to a significant rate increase.
In addition, as Sam pointed out in the February 7 issue, late fees have more than doubled over the past decade, while the time from receipt of bill to due date has shrunk drastically.
Any time you hear the word "reform" in the title of a bill, just bend over and spread 'em extra wide; and don't even bother asking--it's really gonna hurt!