Debtor Nation
One of this week's biggest news stories is the planned overhaul of how bankruptcy operates in this country. I have a lot to say on the subject, but Molly Ivins does it best. While I have heard stories here and there of abuses of Chapter 7 and 13, I have heard of and know a lot more folks who had no intention of going bankrupt, yet they had to. These are honest, hard-working people for the most part, who were completely chagrined at what the choices were. They know their credit's shot, they know it hurts and that it's demoralizing. But often there isn't another way. Yet this bill is a real piece of work; it will really screw things up more, I think. It also pisses me off that as usual, our "noble" Congress is going to allow the rich to exploit tons of loopholes, and allow the rest of us to take the brunt of things. There is nothing "compassionate" about this bill at all, and it lets the credit card companies off the hook. I'm especially perturbed that at the very minimum, the companies aren't being required to indicate on credit card bills the amount of time and money it will take to pay off a balance when making the bare minimum payment. This is irresponsibility at its height.
It's also dangerous economic policy too. The greediness and shortsightedness present in both the corporations and lawmakers obscures the real possibility that by forcing people to go into hock to the credit card companies without the more solid foundation of actual cash and savings behind them, the whole thing becomes a financial pack of cards that could fall down on us all. It also ignores that there are real problems behind bankruptcy: namely, the cause of the bills. One such source is the rising cost of medical care in this country, and that's something no bankruptcy bill is going to fix. From personal experience, I can attest that medical costs are spiraling out of control, and that no matter how frugal a person is, how careful they are, one ill-timed illness, one extensive hospitalization, one medical setback can financially ruin even the most responsible person. I was lucky enough to be able to cover the majority of my bills, but it put me close enough to the edge to know that it can and will happen to others out there.
It used to be extremely difficult to get a credit card in the first place. People didn't get their first one until they'd been working for a while, had established some sort of credit history, and were evaluated carefully by the card companies. Now high school and college kids are getting applications and being encouraged to sign up. Every fall, I'd see tables out by the student union with card applications, and promises of free phones, t-shirts, meals, and other enticements. I've managed to shut off the valve, but until recently, every four or five days, I'd get at least two or three unsolicited pre-approved applications in the mail. The whole thing has really gotten out of control. Not only are people with bad credit being given the chance to throw themselves more into debt, but the proliferation of pre-approval notices just makes it that much more easier for identity theft to occur. The past twenty years or so has been a bonanza for the credit card industry; they are definitely in the black, and not hurting.
As it stands, the bill is just a sweetheart deal for the credit card companies. We will pay the price for corporate hegemony.
It's also dangerous economic policy too. The greediness and shortsightedness present in both the corporations and lawmakers obscures the real possibility that by forcing people to go into hock to the credit card companies without the more solid foundation of actual cash and savings behind them, the whole thing becomes a financial pack of cards that could fall down on us all. It also ignores that there are real problems behind bankruptcy: namely, the cause of the bills. One such source is the rising cost of medical care in this country, and that's something no bankruptcy bill is going to fix. From personal experience, I can attest that medical costs are spiraling out of control, and that no matter how frugal a person is, how careful they are, one ill-timed illness, one extensive hospitalization, one medical setback can financially ruin even the most responsible person. I was lucky enough to be able to cover the majority of my bills, but it put me close enough to the edge to know that it can and will happen to others out there.
It used to be extremely difficult to get a credit card in the first place. People didn't get their first one until they'd been working for a while, had established some sort of credit history, and were evaluated carefully by the card companies. Now high school and college kids are getting applications and being encouraged to sign up. Every fall, I'd see tables out by the student union with card applications, and promises of free phones, t-shirts, meals, and other enticements. I've managed to shut off the valve, but until recently, every four or five days, I'd get at least two or three unsolicited pre-approved applications in the mail. The whole thing has really gotten out of control. Not only are people with bad credit being given the chance to throw themselves more into debt, but the proliferation of pre-approval notices just makes it that much more easier for identity theft to occur. The past twenty years or so has been a bonanza for the credit card industry; they are definitely in the black, and not hurting.
As it stands, the bill is just a sweetheart deal for the credit card companies. We will pay the price for corporate hegemony.
posted by Mr. Sandman | 5:21 PM
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