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The diary below was originally posted in my blog the Intrepid Liberal Journal.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was arguably the most odious piece of domestic legislation the previous congress passed. President Bush and his party typically cited it as among their "accomplishments" and the media seldom questioned whether it was a good idea.

This "accomplishment" amounted to nothing less than class warfare waged on behalf of the super rich against the little guy. Indeed, it illustrated the sheer indecency of the Republican Party machine and pervasive influence of banks, credit card companies and the financial services industry as a whole.

Sadly, the Republicans were aided and abetted by the support of eighteen Democrats in the Senate - including Minority Leader Harry Reid. For the record, New York Senator Hillary Clinton did not vote at all. Over seventy House Democrats supported the measure as well. Others who did not vote for it supported the Republicans in their parliamentary tactics and maneuvers to get it through. Senator Joe Lieberman of Connecticut was especially guilty of two-faced behavior - denouncing the legislation while supporting Senator Bill Frist's efforts to shut off cloture.

A few such as Senator Charles Schumer of New York valiantly put up a fight. Schumer actually tried to attach "poison amendments" to the new law and make it more difficult for people who blow up abortion clinics to declare bankruptcy in paying for their legal defense. That tactic worked for a couple years but without the support of the Democratic leadership the bill's final passage could not be prevented.

Well now the political landscape has changed with newly elected populists poised to take control in January. Senator-Elect Jon Tester for example doesn't appear to be the type to sell out his constituents for heavy contributions from Bank of America. While Democrats are culturally diverse, repealing the 2005 law is a meat and potatoes issue the entire party can rally behind.

More importantly, Democrats have a moral obligation to make a stand and repeal the legislation after their fecklessness in the previous congress. They also have an opportunity to demonstrate they are on the side of working people and small business entrepreneurs.

Here is some background and context for those not familiar with the issue. During the economic boom of the 1990's (remember that?) banks went on an irresponsible lending spree. They issued credit cards to people with either poor credit history or none at all. It was not uncommon for someone of questionable income or even no income to receive a platinum credit card from Citibank, Chase or Capitol One with a generous credit line.

While attending graduate school I interned at the corporate library of American Express in 2001. I maintained a journal of my experience and memorialized a conversation with a Vice President I occasionally performed research for and was on good terms with. I asked this gentleman why American Express was targeting less affluent people and wondered if they were assuming an unreasonable risk in doing so. He told me,

"They're all going to have to pay eventually. The lawmakers are on our side because of heavy campaign contributions from our industry. First we have to get Joe and Jane Smith hooked on the great American drug: credit."

I followed up and asked if that might cause undue hardship for the middle and working class who were strapped for cash in the short term and didn't understand the long-term consequences of burning a hole through their credit cards. His response to that was,

"Not my problem."

Predictably, people in the middle and lower income brackets hit a wall when the economy went bust and jobs were lost. Many were confronted with medical calamities in their families, had no health insurance and no means of meeting their financial obligations. In the past such people had the option of declaring Chapter 7 Bankruptcy and getting a "fresh start." Conservative critics typically excoriated the concept of a fresh start as an unjustified reward for profligate spending. In fact declaring bankruptcy is a lifeline for people in legitimate need.

A "fresh start" used to be the objective of American bankruptcy law. The law passed in 2005 requires people who earn more than the median income in their state to pay off their debts on a five-year repayment plan. In theory, lower income earners may still avail themselves of Chapter 7's debt-erasing provisions, but they're confronted with all sorts of additional hurdles, including mandatory credit counseling, greater paperwork requirements and rising lawyers' fees. These obstacles make it virtually impossible for lower income people to declare bankruptcy.

Contrary to conservative propaganda most do not declare bankruptcy because of profligate spending. Typically, lower and middle-income workers are forced to declare bankruptcy because of a medical calamity in their family. If a lower income individual with limited or no health insurance can't declare bankruptcy when a child suffers from a medical calamity, they're in danger of complete financial destitution - even homelessness. Indeed, many of these people are among the over 40 million not currently benefiting from health insurance or their coverage is simply inadequate to meet their needs.

Another important impact of the new bankruptcy law is that an indispensable safety net for small risk taking entrepreneurs is gone. Bankruptcy regulations that apply to large corporations are essentially unchanged. For example, an airline can declare bankruptcy and avoid financial obligations regarding their employees' pension funds. However, the current law does facilitate economic distress on those small businesses that our economy is so dependent on for job creation.

Unlike large corporations, individual owners usually finance small businesses with money from their own bank accounts. Previously an owner of a failing small enterprise had the option of declaring bankruptcy so they could obtain a fresh start and still take care of their family. With that safety net removed it is far more difficult for the little guy to be an innovative risk taker.

In September I interviewed talk radio's Thom Hartmann and he noted to me that Henry Ford declared bankruptcy seven times. So if it was good enough for Henry Ford why not for today's small businessperson?

Relaxing the bankruptcy laws would have a far greater impact on job creation than tax breaks for the super rich. Indeed if small business were relieved of the burdens of healthcare costs through a single payer system coupled with a relaxation of bankruptcy laws it could be a job stimulus for our economy.

The financial services industry will move hard and fast to seduce the new Democratic majority. It would not surprise me if the financial services industry lobbies the new congress for even more stringent bankruptcy laws while Bush is still in the White House. Every time new bankruptcy legislation has become law in recent years it was to benefit the financial services sector. How sickening if in coming weeks we read press clippings that lobbyists from credit card companies find the Democrats "pragmatic" and "accessible." It's time to reverse that trend starting with this new congress.

Replacing the 2005 law with more consumer and small business friendly legislation makes political sense and is good policy. It would put Republicans on the defensive and enable Democrats to further shift the center of political gravity in a populist direction. The corporatist media and K-Street lobbyists are eager to portray the election as having little to do with a repudiation of conservatism. Flexing political muscle on this issue will help transform the national conversation on domestic issues and keep Republicans back on their heels.

In all likelihood President Bush would veto such an initiative. If he does then it helps the party educate small business entrepreneurs and working people why it is in their interest to put a Democrat in the White House in 2008. Perhaps some Republicans could be persuaded to join Democrats out of political expediency.

The key of course will be to maintain unity in the Democratic caucus. That's where the netroots can make an important contribution. We have to make it clear that we consider the bankruptcy law class warfare from the top and expect Democrats to make a stand about it.

It's one thing for Delaware Senator Joe Biden to support the legislation because his state is a bastion for the financial services industry. But if he's serious about competing to become my party's standard-bearer in 2008 then he has to change his position. Another example is Senator Evan Bayh of Indiana. Senator Bayh it's wonderful that you're from a red state and have gubernatorial experience too. However, you're among the Senators that supported Bush's bankruptcy law and until you change your tune I'm not going to waste my time with you.

This needs to be a litmus issue for Democratic candidates in 2008. Hillary Clinton is constantly calculating and recalibrating her positions. She'll embrace flag burning amendments to appear "moderate" and supported Bush's national security policies in Iraq until recently. Well I'd like to see Senator Clinton put her prestige on the line and help lead a fight to repeal this horrific law. Hell it could be an opportunity for her to establish some populist credentials of her own heading into the Democratic primary season. Let her calculate in a progressive direction for a change and promise that if elected president she'll sign legislation overturning the 2005 law.

As for Senator Barack Obama let him take an unequivocal stand that isn't mealy mouthed and state outright the 2005 bankruptcy law is reprehensible. Why not lead the fight to change it Senator Obama? Perhaps that might enable the freshman senator to accomplish something tangible in his term before hanging out in Iowa and New Hampshire.

John Edwards this is right up your alley. Demonstrate that you're the true champion of the little guy and push your party to do the right thing. You have populist stature already and can distinguish yourself even further from Clinton and Obama by making this one of your issues.

Governor Vilsak you can get some traction as the Washington outsider not infected by K-Street disease. Prod your party from the heartland. Forcefully deliver the message this law is a travesty of governance in Washington, and you pledge to repeal it if elected president. It's a stand worth taking and perhaps might propel you in an otherwise bloated field of big names and big money.

Let's face it Governor Vilsak there is no way you'll ever raise more cash than Clinton, Obama, Edwards or even the hapless John Kerry. So why not be the people's champion and use this issue to differentiate yourself from the pack? With Feingold out of the picture progressives are hungering for a candidate to rally behind so why not you? Everyone, including Hillary will be rhetorically against the war in 2008 so why not add some old fashioned domestic populism to your pedigree?

I didn't phone bank after hours and weekends prior to Election Day because it was fun. I did it because I want change. The bankruptcy law of 2005 is a prime example of what Democrats need to change forthwith.

Originally posted to intrepidliberal on Tue Dec 05, 2006 at 04:41 AM PST.

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Comment Preferences

  •  What makes you think that Joe (MBNA) Biden will (4+ / 0-)
    Recommended by:
    sphealey, PaulVA, lcrp, Progressive Chick

    change his ways?

    Yeah, I know that Bank of America (Charlotte, NC) now owns him (or at least MBNA), and that to truly represent them, he'll have to be a DamnYankee and move South.  (That might explain his South Carolina performance -- Delaware as a slave state -- but he'll only be a carpetbagger as far as I'm concerned.)

    Too many guys in the Senate are in bed with the monied interests.  No way will this change in '06.

    Edwards in '08 is a possibility.  We'll have to see.

    Happy little moron, lucky little man. I wish I was a moron, my God, perhaps I am! -- Spike Milligan

    by polecat on Tue Dec 05, 2006 at 04:46:53 AM PST

  •  Yes people are hurting. But could backfire on Dem (1+ / 0-)
    Recommended by:
    Progressive Chick

    ocrats. This law is artificially keeping the number of people declaring bankruptcy low. By repealing it and the number spikes the GOP will jump on it and say democratic policies are hurting the economy. In this light dems may have to peel it back slowly and not kill it immediately.  

    Be carefull what you shoot at, most things in here don't react well to bullets-Sean Connery .... Captain Marko Ramius -Hunt For Red October

    by JML9999 on Tue Dec 05, 2006 at 05:11:16 AM PST

    •  Not true. There was a temporary dip in Bankruptcy (4+ / 0-)
      Recommended by:
      lcrp, gkn, Progressive Chick, JML9999

      filings and they subsequently returned to pre reform numbers. The reason for this is the "mandatory consumer credit counseling" was a small hurdle. Once these "Non profits" figured out a loop hole, they started using it to their advantage.

      The loop hole is all you need to file bankruptcy now is a certificate from an approved CCC. Just go to the list, find one online, andswer a few questions,  pay 50 bucks and you have your certificate in less then 24 hours.
      The problem is is that debt is no longer "wiped clean" the trustee looks at the debt, the income and mediates with the debtor to come to a reasonable number to pay back. it's the reasonable number that hurts people. They can't pay it back.

      Invest in America, Buy a Congressman!

      by Lockedupspirit on Tue Dec 05, 2006 at 06:28:10 AM PST

      [ Parent ]

    •  Backfire? I wasn't aware that there was a surge (1+ / 0-)
      Recommended by:
      Progressive Chick

      of public support for tightening bankruptcy laws. This law kicks people who are already down and is one of the most vile pieces of legislation that has passed under Bush. The fact is that there is nobody who doesn't work for the credit industry who would be unhappy to see this law repealed.

      If your name was George Walker instead of George Walker Bush, your candidacy would be a joke.

      by dole4pineapple on Tue Dec 05, 2006 at 10:26:24 PM PST

      [ Parent ]

    •  Not Time To Peel it Back (1+ / 0-)
      Recommended by:

      People are in desperate straits because of this reprehensible law.  

      Everyone cites that Elizabeth Warren study that the overwhelming percentage of bankruptcy filings are caused by medical bills.  Repealing the law won't stop people being bankrupted by medical bills, it will just allow them to file again.  Repeal has to be a joint priority with universal coverage.  

      What has happened to this country in the past 6 years has shamed us all.  

  •  Thank You (10+ / 0-)

    For posting this diary.  I suspect that most folks on the left do not grasp how important it is to do away with this particular corporatist gift to America -- as important as a variety of things thrown about as being priorities for the "first 100 hours" -- do not champion repeal of this Dickensian piece of legislation because, deep down, our culture still attaches "moral blame" to the concept of bankruptcy.  Many people who should have declared bankruptcy under the old system never did -- because of the shame of being unable to pay one's debts.  Today, however, those that should be able to avail themselves of bankruptcy (i.e. those folks who start out owing $500 on a credit card and then because they are on hard times end up owing $2,500 because of monthly late payment and overlimit charges that the MBNA's and Citibanks of the world levy) cannot get a fresh start -- whether because they do not qualify under the extremely low income thresholds  used in the bankruptcy bill to determine eligibility for Chapter 7 status, cannot get a low-cost or pro bono lawyer to help them with their bankruptcy anymore (because of the provisions making lawyers personally responsible for the representations of their clients in their bankruptcy schedules; I do not know any non-profit legal services provider in Northern CA still willing to provide bankruptcy help because of this), or even being unable to readily attend a "credit counseling class" offered by a screened set of providers in time to avoid something like a scheduled foreclosure.

    So thanks for thinking about the meat and potatoes, rather than the political fluff.


    My separate place for mental meanderings: Political Sapphire

    by shanikka on Tue Dec 05, 2006 at 05:17:35 AM PST

  •  great diary on an important issue (6+ / 0-)

    My eyes didn't even glaze over! Seriously, this is an excellent diary all around. Very important subject. Thanks for posting it.

  •  We need a "War on Fraud" (8+ / 0-)

    Countless honest and hard working people are scammed out of their money, and the gov't is doing very little about it.

    Shame on you, Dubya!

    - Israel has the right to exist, and responsibility to coexist.

    by Opinionated Ed on Tue Dec 05, 2006 at 05:47:04 AM PST

  •  Edwards on Bankruptcy Bill (11+ / 0-)

    Edwards was influencial in keeping the Bankruptcy Bill from coming up for a vote while he was in the Senate.  It only came up for a vote after he did not seek reelection.  

    For his views on the Bankrupcy Bill see: Podcast #2
    where he discusses his Opposition to the Bankruptcy Bill (Elizabeth was Bankruptcy Lawyer).

    Sorry, I've got to run, but you can find the Podcast on ITunes (Search John Edwards or One America Committee) or get help by going to

    Edwards regularly speaks out against predatory lending, but it would be nice to hear him go on the offensive for a repeal.

    "We need to ask America to adopt a new kind of patriotism, a patriotism about something more than just war." -- John Edwards

    by philgoblue on Tue Dec 05, 2006 at 05:47:11 AM PST

  •  The institutions (4+ / 0-)
    Recommended by:
    lcrp, isis2, intrepidliberal, kurt

    that lend money need to learn that sometimes people don't pay it back.  It is part of their business.  Every other business would go under if they did business as wrecklessly as the lenders.  To get the government to bail them out when they screw up is pretty clever.  We can't let them get away with it.  

    I don't know of ANYONE who agrees with the bankruptcy changes....except some wingnut relatives who think no one should get a free ride.  Of course, the only stats they ever cite have to do with the woman who racked up $120,000 in credit card debt and just had it "wiped clean".  They never speak of the families who are devastated due to medical bills.  Or the families who lose the breadwinner of the family and can't pay the debts.  And what people seem to forget is there is a 7-10 year wait to get credit again once you declare house, no car, possibly no job, no nothing in today's world where everything is based on your credit score.

    And $40 late fees?  Are you kidding me??  My frickin' mortgage only charges a $5.00 late fee.  It's just plain unconscieneable.

    •  Well (3+ / 0-)

      Actually, from what I have read, declaring bankruptcy doesn't preclude getting credit again to the extent that some people claim. Counterintuitively bankruptcy makes someone more attractive to the credit card companies because they know that the borrower can't declare bankruptcy again for seven years. The interest rates would indeed be usurious, but it is still possible to get credit after bankruptcy. For DC related travel advice, please visit that link.

      by jiacinto on Tue Dec 05, 2006 at 07:17:15 AM PST

      [ Parent ]

      •  Good points (3+ / 0-)

        but if you're going to have a 32% interest rate on any credit you take, what's the point?  Wait the 7 years and start over.  Friends of ours wanted to buy a house 5 years after the wife had declared bankruptcy.  She could not be considered when they applied for the mortgage, or their rate would have been something like 14%.  When they applied with just the husband's name, it went down to 7%.  That's the only personal knowledge I have of anyone who has declared bankruptcy....

    •  The other thing (4+ / 0-)
      Recommended by:
      sphealey, gkn, kurt, Progressive Chick

      Credit card companies want debtors to fall behind or be late. They make more money in late fees and higher interest rates. They hate those who pay their balance in full every month. They make no money off of them.

      Most people who fall into financial distress do so due to illness, prolonged unemployment, natural disaster, disability, or some other misfortune beyond their control. While I do agree that there are some debtors who fall into financial trouble because of overspending, if you really look into it, most people do not become financially stressed because they want to.

      Job loss can totally wreak financial havoc on someone's life. I can attest to this. I've been out of professional work since March. I've been temping, working odd jobs off and on, in the meantime; but I have endured some hardship as a result of losing my job. I am lucky to have my assets to help get through this, but I can only imagine what it must be like to lose a job and not have any savings to work through.

      Anyway, though, most of these credit card companies end up selling the debt to collection agency firms. The rest they can write off through charge offs. And the collection firms can often make a killing off of the old debt. So, while these companies do suffer somewhat financially, the loss is often mitigated. For DC related travel advice, please visit that link.

      by jiacinto on Tue Dec 05, 2006 at 07:29:30 AM PST

      [ Parent ]

  •  i like your style a lot ;) n/t (2+ / 0-)

    Diversity is the key to economic and political evolution.

    by MarketTrustee on Tue Dec 05, 2006 at 06:04:45 AM PST

  •  Thanks Everyone ... (2+ / 0-)
    Recommended by:
    isis2, Progressive Chick

    I would engage more but I'm at my job. I will endeavour to respond to comments later. Hopefully the Democrats are listenting.

  •  Well (2+ / 0-)

    I agree with you. This bill should be modified or repealed. This bill was the biggest disappointment for me. While I can understand and tolerate the DE and SD's delegations votes on this bill, as they both represent states where the credit industry employs a large share of their constituents, other Democrats don't get a pass. This bill was wrong and horrible. For DC related travel advice, please visit that link.

    by jiacinto on Tue Dec 05, 2006 at 07:15:33 AM PST

  •  Add this one near the top of the to-do list (2+ / 0-)

    Hopefully my alleged Democratic Rep. Jim Matheson will vote to repeal what he voted for last time.  What a raw deal for consumers, and my congressman voted for it.

    "Everything's shiny, Captain. Not to fret."

    by rmwarnick on Tue Dec 05, 2006 at 08:33:01 AM PST

  •  The Bankruptcy Bill was passed with significant.. (0+ / 0-)

    The Bankruptcy Bill was passed with significant Democratic support.  With the Dems now stopping by K Street for cash infusions daily, the chances of any changes being made are less than zero.


    •  i'm afraid you're right (0+ / 0-)

      the last thing i wanted was to trade one set of K street bingers for another. there are a few democrats i'm hopeful about, but otherwise... not so much.

      I wouldn't mind turning into a vermilion goldfish. --Henri Matisse

      by isis2 on Tue Dec 05, 2006 at 08:55:45 PM PST

      [ Parent ]

  •  Health Care Bills (3+ / 0-)

    One thing the legislators don't understand is that many medical groups and hospitals have been using collections agencies for Primary Billing. If you call them to negotiate a payment plan, they will refer you directly to the Collections Agency. Therefore a person's credit record is damaged the minute they get a doctor's bill.

    A person who is already on the ropes financially does not need an additional and probably unwarranted ding on their credit record.

    Even if a hospital is constrained not to do this - hospitals contract with doctors in private medical groups. It seems to be the doctors who have no shame about using Collections Agencies for billing.

  •  This should have been filibustered (3+ / 0-)

    I could not believe the dems did not sieze on this to show how Republicans love corporations and hate the rest of us.

    Repealing it will be harder and nobody running for office wants to piss off that much money.  Obama is going to stear well clear of this one.  Clark might come out against it.

    I can't believe Kos thinks Obama will be the one in 08!

    Want to watch Republican economic theories in action? Look at Iraq.

    by Michaelpb on Tue Dec 05, 2006 at 08:27:45 PM PST

  •  I declared bankruptcy in anticipation (5+ / 0-)

    of this bill's passage. I have a good income, stable employment, but had more than a year's worth of salary as a debt load on credit cards. We were caught in the vortex of paying interest and service charges but never making a significant reduction in the debt. I have health insurance but when my daughter was born we incurred expenses that were not covered. I used my family leave to the fullest extent and went without salary for a full month to take care of my other kids so my wife could stay in the hospital with the baby. Despite all this, I could have stayed in the same financial situation of treading water had I not declared. If I had waited, I would have not qualified under the new laws. Because of the stigma associated with bankruptcy I resisted as long as I could, but my hatred of all things republican eventually made it easy to push that button.

    I am no stranger to bankruptcy; I had filed 11 years earlier when my first marriage broke apart. It had allowed me and my ex-wife to dissolve our financial ties to each other fairly and without conflict. Stuff happens. We sought relief, it wasn't a crime.

    There are so many fundamental inequities for average Americans, most people simply take them in stride accepting them as flaws in an imperfect system. And in our politics, we are constantly supporting those who work against our own self interests, such as those who supported this odious legislation. We are really a society of suckers for lacquered hair, whitened teeth and a hearty handshake, aren’t we?

    As the rest of us are being forced to live Wal-Mart world and like it, big business continues to be financially forgiven for even the stupidest of business ventures. While they are allowed to freely steal from our pension funds, America's ruling class continues to be sheltered and rewarded by bankruptcy.

    Are the very same laws that suddenly need to be "reformed" for us never abused by the wealthy? The wealthy have never considered themselves abusers of this system! Why, it's only the little people that abuse! How dare I insinuate such nonsense!

    To clarify terms, they simply use the time granted by protection to reorganize in a positive manner, and the ship sails on through those rough waters.

    But for the rest of us, after we use our "right", we must disclose our misfortunes on demand to anyone who asks, marked almost as criminals-- or at the very least, cast as untrustworthy steerage for many years after the fact.

    Thanks for posting this diary. hell below us, above us only sky.

    by rightiswrong on Tue Dec 05, 2006 at 10:14:07 PM PST

  •  I'm with you (2+ / 0-)
    Recommended by:
    rightiswrong, intrepidliberal

    This is a very harmful law.  Ohioans know how awful it has gotten here, and so many people are declaring bankruptcy.
    Even the Republican running in my district, the one who wanted to take Bob Ney's place in Congress, had declared bankruptcy not long before the election.  (Months, I think.)
    It will have to get much worse before there's any chance of repeal. But I have hope.

    War is not an adventure. It is a disease. It is like typhus. - Antoine De Saint-Exupery

    by Margot on Tue Dec 05, 2006 at 10:24:58 PM PST

  •  Absolutely Correct (2+ / 0-)

    Were I in Congress this would be one of the things at the top of my list. It ought to be tied to the need for Universal Health Care also, as medical emergencies are one of the main contributors to BKs.

  •  Usuary and bank fees are at the Heart of it (5+ / 0-)

    I declared BK just before the new law. Since then I receive five to ten credit card and loan offers a week. One shows an interest rate of 42% and adds in fine print "minimum".

    Practically every working family in America would benefit if usury were illegal and bank fees limited. I suggest the Democrats pass legislation setting a maximum interest rate of 18% APR and a maximum late fee or bounce check fee of $10.

    Finally, pass federal legislation allowing private parties to lend money to other private parties at up to 18%. Give the banks some competition - it is called capitalism. Currently most states limit private loans to as little as 6% interest. Banks, those bastions of capitalism, hate competition and have made it illegal.

    This one single thing would probably do more to reduce BK's than anything. It stops the vortex that sucks in everyone and turns little problems into disasters.

  •  If you want real change (1+ / 0-)
    Recommended by:

    Read the K Street Solution

  •  While they are at it (1+ / 0-)
    Recommended by:

    they should stop car insurance companies from charging higher premiums to those who have poor credit. That is what they do in our state. That is ridiculous and should be outlawed.

    Our car insurance kept going up and I called and asked them if they had gotten a bad credit report on us, that we had excellent credit. The woman there said, "No, we just decided to go up."  I told her, "I just decided to change companies."

    Divorce and loss of jobs are big reasons to file bankruptcy, too.  Where two have been making the payments, just one can't do it.  If you lose your job, you are 3 payments from losing your home.

    These bankrupcy laws can go to your state to decide how much of your home is exempt. In our state only a $3,000 home is exempt from being taken. I asked Blanche Lincoln why she didn't try to raise that amount and didn't get an answer. She is of the Money party, you know. She did say that she voted for the bankruptcy bill so the poor could get credit.

    We have been set up to fail and not have anything to leave our children.  Financial experts say to expect $200,000 medical bills after retirement. That is with Medicare insurances and co-payments.  That will bankrupt many people because they will be lucky to get $20,000 Social Security.  Medical costs will average out to $10,000 a year. The yearly drain will take their savings, force them into mortgaging their home and maxing out credit cards, before they can go bankrupt. Then it is seven years before they can file again. Seven more years of medical bills.

    Life is what you focus on. Let's focus on ending the war and economic fairness. After that the rest will be easy.

    by relentless on Wed Dec 06, 2006 at 05:51:14 AM PST

    •  The Use of Credit in Car Insurance Makes No Sense (0+ / 0-)

      In 26 years since leaving home I've had more financial downs than ups.  I divorced my first husband 10 years ago, he stopped working, he stopped child support, and I had two kids, a modest house we could only afford together and a public interest salary.  We went Chapter 7 in '98.  In '99, I had to file a 13 to straighten out mortgage arrears, and eventually I had to sell the house when it went into foreclosure.  

      My credit is shot.

      My driving record is spotless.  I've had one ticket in 26 years.

      Thanks to my credit, which obviously has absolutely nothing to do with my driving, I'm paying more for my car insurance than I would if my credit was as spotless as my driving.  They claim that people with bad credit have more accidents.  What does a late credit card payment have to do with speeding, tailgating or obstructing traffic????  

      That's just robbery.  

  •  The Bankruptcy Bill (1+ / 0-)
    Recommended by:

    Write your new Congressman and demand he/she repeal
    this gift to the banking industry. This is the penultimate example of special interest legislation and the rot premeates K street. I will vote for no candidate who suppoted this monstrosity or for one who will note vote for it's repeal.

  •  We declared too, in 2003 (1+ / 0-)
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    Several years ago, we declared bankruptcy.  

    We had a great income, but also quite a bit of debt.  My husband did have a habit and spent above his means.  BUT, our debt was also due to various unforseen circumstances: long-term unemployment, moving of residence, medical issues and some wedding expenses.

    When I lost my job and could not find another during that peak of the recession, it was only after a year of struggling, having trouble buying groceries that we decided to do it.  Had I not lost my job, we would have continued paying our debt, which was large, but manageable.  (Although it felt like treading water.)

    In the years since, I have just started to rebuild my credit.  FYI to some posters, this kind of bankruptcy is on your record for 10 years. I finally got a credit card on my terms.  It has a decent APR, and a respectable limit.  The only down side is that it has an annual fee.  

    My bankruptcy attorney wrote on his blog that despite the change of laws, the number of people declaring bankrutpcy has not changed.  This legislation seems to have backfired for the preditory lenders.  In the past, it was up to the judge to decide whether the person was worthy of having their debts waved.  It just so happens, even with the more stringent rules, the numbers have not changed.  That just wipes away any myths people had about bankruptcy in the past.

    I think the late fees are ridiculous as well as over-the-limit fees.  As far as I'm concerned, they should not allow one to go over their limit.  I have talked to banks about this and they claim they don't want to embarrass you.  Frak, embarass me.  When you are close to your limit, it's hard to know what your exact balance is and who the hell wants to pay a $35 otl fee for going over by $2?

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