While thousands of people were left in New Orleans after Katrina, many, many more left the city before the storm came/ It's going on three weeks now, and you have to wonder how these folks are getting along, living in a hotel gets really expensive, and Americans are not exactly world class savers. So how do you suppose these folks are paying the bill?
Well, it looks like they're charging it.
More on the flipside.
Their first week on the road, they charged $1,600 in food and hotel bills in Houston, about $400 worth of clothing, mostly from discount stores, and a couple hundred more on gasoline.
Jerry Alciatore splurged $1,200 on a laptop to keep in touch with employees of his small architectural firm, pushing the credit card bill to about $5,000. They'll soon have to make another mortgage payment on their house in Metarie, which was damaged but not destroyed by 3 feet of floodwater.
"I'm worried. We have about a one-month gap where my income will be cut off and so will my wife's," he said. "I have to see if my business is still going to be OK. We're going to be out of our house for maybe three months, but I have a mortgage payment every month, and now we have to rent an apartment."
I suspect that the Alciatores are far from alone in charging the basic necessities to get along until things get better, but even if these folks are able to go home, what are they going to be going home to? A lot of the jobs in the NOLA area simply no longer exist, they've been swept away with the black waters. These people are going to be trapped, because they have to have a job to pay the bills, and that just isn't going to be something that's there for a lot of people.
Not to minimalize the suffering of the people who were left behind, but suffering is nothing new to a lot of the poor folks that were stuck in the city. Their worldview expects that things aren't going to work out, that's just the way it's been. But a lot of the folks whe left earlier had something, they had the trappings of a middle class life, and they had the silent confidence that comes from having things turn out ok most of the time. That's all going to change. Theyve worked their way through their savings, and now they're charging their way into a whole heap of trouble. And they have to because they have no choice. But the recent changes in bankruptcy laws are only going to make it harder to escape the debt trap.
The Consumer Federation of America and other groups are lobbying Congress to delay the new bankruptcy law, which they opposed all along. A delay would help Katrina victims file for Chapter 7 bankruptcy protection under the old law, making it easier for them to wipe out most kinds of debt rather than set up a 3- or 5-year repayment plan.
"They turned the bankruptcy courts into collection agencies for credit card companies. That means there's less protection for victims of Katrina," said Elizabeth Warren, a bankruptcy law professor at Harvard and a critic of the new law.
The American Bankers Association is opposed to delaying the new law. Floyd Stoner, the group's executive director for congressional relations, said creditors and bankruptcy judges will treat hurricane victims sympathetically.
"If you lost all your assets, you're not going to have to repay part of your debt ... that will be even more true in a natural disaster like Hurricane Katrina," Stoner said.
I can only hope that Mr. Stoner isn't blowing smoke up our asses.