Much of the press given to the bankruptcy bill currently in the Senate has been concerning the claim that bankruptcy is being used as a dodge, that dishonest people are using bankruptcy to duck their personal responsibility in paying off their debts.
The use of "personal responsibility" as a bankruptcy touchphrase is disingenuous. In this modern era, in which corporations make obscene amounts of revolving debt available to individuals, it is worth remembering that corporations came into being as a means of divorcing business owners from bearing personal responsibility for their actions taken in the course of business.
In a society based on personal responsibility, there are no corporations. There are only individuals who bear full responsibility for their actions, whether in business or otherwise.
In the business sphere, we left the personal responsibility society in the 1800's. Prior to that time, a business was a sole proprietorship or a partnership. In such a society, the consequences of any business decision can affect the personal wealth and freedoms of the owners. Sole proprietorships and general partnerships do not protect their owners from personal liability for business decisions.
In the 1800's, the legal concept of a corporation was created. Under this concept, a person could participate in the financial success of a business, but the person's potential for financial loss was limited to their initial commitment in buying shares in the corporation. The corporation could get fined, taxed, and sued into oblivion, but shareholders were not personally liable for the debts of the business, nor were they personally indictable for property or personal damages caused by defective products.
This legal protection is what made it possible for large groups of people to pool their resources and build large companies, without having to first build the mutual trust required in enter into mammoth 30-way or 100-way partnerships. But, the same legal protection is now exploited by corporate executives who, under the guise of "doing business", do things that would expose a sole proprietor to a real risk of losing personal assets or freedoms. A few examples include flouting minimum-wage laws, dumping toxic waste, and defrauding customers.
It is always within society's power to revise the law. MBNA, GMAC, Citibank, and the like exist only because we allow their corporate structure to be legal. Should the executives of these corporations continue to exploit the law to their gain at the expense of society, they should not be surprised if we the people demand revisions in the law.
Perhaps we could start by making the members of each corporation's board of directors individually and severally liable for all debts and obligations of the corporation, and deny said corporations, and members of the board, from seeking bankruptcy protection from any such debts and obligations. Remember, it's a matter of personal responsibility to repay one's debts.