Bankruptcy Law in Shambles

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• Reader Comments (13)

  Page 1 of 1 pages

  There’s more.

  There are provisions which cannot practicably be enforced across the board, on all lawyers who practice before the courts.  Current wisdom is that they will be helpful in catching the bad apples though ...  This should bother you.

  There is a section that restricts legal options which can be discussed unless the client has a minimum asset structure.  I.e., there are things you are prohibited from telling poor people but can suggest to the wealthier.

  The lawyer is required to investigate his clients, whether or not in her judgment the investigation makes sense or is cost-effective.

  The lawyer is required to initiate discussion of dishonesty with the clients, and have them sign paperwork demonstrating that perjury has been discussed.  Any system in which the option of perjury is considered at the get-go is a system in trouble.  Many first interviewees have a palpable desire to disclose and make amends.  To advise someone who hasn’t thought of it yet that the system can be gamed is an outrage.

  To opine that everyone has already thought of gaming the system is an outrage.

  To opine that debtors are more dishonest than the average client who hires a tax attorney ... that would be an outrage if it wasn’t so laughable.

  To opine that the bankruptcy problem was caused by the legislation, rather than by a credit industry that ignored market forces and continued to lend to people no matter whether they filed a bankruptcy or not ... ‘tain’t true Magee.  Where is our commitment to market justice now?

  The Office of the US Trustee has become the collection arm of the vehicle finance business.

  Don’t ignore this.  If you get through life without needing a bankruptcy lawyer, that’s great but if your child marries that bimbo or bum; or your entrepreneurial venture hits the market and bounces off; or your company tanks and takes your pension with it; or you get sick; or your child gets sick.  America was built on the idea that there are economic second chances.  It’s in the Constitution, but it’s not in BAPCPA.

  Posted by Meghan on Jun 6, 2006 at 1:52 PM

  Sounds like this piece of bipartisan BS fits right in there with the 401(k) plan, The American Jobs creation Act of 2004, NAFTA,CAFTA and all the others designed to serve the big campaign donors.

  I understand there are now 36,000 lobbyists in Washington — hey, how’s that for job creation!

  Posted by whattheheck on Jun 6, 2006 at 6:25 PM

  I have only one thing to add, and it was said in writing and penned on July 4, 1776, by men far wiser than me, but based upon the current state of, for example, the BAPCPA (or BARF), all but forgotten by too many:

  Governments are instituted among Men, deriving their just powers from the consent of the governed, – That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shown, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

  Posted by esbinlaw on Jun 7, 2006 at 11:50 AM

  Mark the day. For once I am in 100% agreement with this article and the comments posted so far. Our elected representatives have failed us in a disgraceful fashion. Shame on credit card companies and other predatory lenders who not only charge exorbitantly high interest rates ostensibly to cover the cost of deadbeats, but then turn around and try to get yet another pound of flesh from people who in many case have had some catastrophic event befall them. I’m disgusted by all the actors in this obscene show of rapaciousness and amorality.

  Posted by crashtech on Jun 9, 2006 at 12:23 AM

  Great article Brian!  I hope all is well with you!
  -Jocelyn Prince (former Chicago Reporter intern and freelancer)

  Posted by jprince on Jun 14, 2006 at 10:35 PM

  Those individuals who did abuse the system (since the 1950’s actually) and filed repeatedly for “bogus” bankruptcy - were in the top income percentages across the board (all states).

  Interesting, THIS group of repetetive filers were the ONLY group actively sought out by credit card companies to reissue cards.

  The ordinary person encounters not only great social stigma for filing bankruptcy but also housing discrimination. In the low to median income housing markets, a bankrutpcy filing disqualifies a person out of hand.

  The wealthy person or corporation filing bankruptcy experiences zero social stigma, it is considered an acceptable financial mechanism, sort of a “Born Again” financial renewal.

  Anna
  Ex. American Express Quantitative Analyst, Marketing Dept.

  Posted by annarovita on Jun 15, 2006 at 6:45 PM

  I did do quite a lot of reading about this proposed legislation before it was passed and signed. After the senate vote I could now believe that 17 democrats in the senate had voted for it. This was outrageous, what had happened to the party that supported the working class of this country? I had to email each of them and vent, we hear about the whores in the MSM, what about the whores in the congress. I am very hopeful that this Nov will be a major blood bath in the so-called ‘representatives’!

  Posted by racom on Jun 16, 2006 at 2:26 PM

  The law was first voted out of committee under Clinton.  I hate to say it but I think the Democrats who did this were trying to boost their “Mom-and-Apple-Pie” credentials while also relying on Clinton to veto it.  No one likes a debtor; better not to go on record supporting them; let someone else take the political hit.  You have to suspect they liked the lobbyist money they were getting too.

  I wrote Dianne Feinstein, who was one of the Senators originally voting it out of the Judicial Committee, but she manfully parroted back all the nostrums about the burden on bankruptcy on the non-debtor population.  She did this for years as I emailed my objections, for years.

  No outrage till the end, when the Republicans prevented all (or almost all) amendment in the days right before final passage.  Now that was a really thugish piece of Republican final maneuvering, but the amendments Feinstein was pushing at the time were also ludicrously narrow and non-responsive to the obvious problems with the bill.  She never engaged with the issues at all and really, this was an obscure area of the law where discussion should have been possible.  It wasn’t like gay marriage or the war, where everybody gets riled instantaneously.  But the intelligent debate never happened, for almost a decade.

  Posted by Meghan on Jun 16, 2006 at 2:53 PM

  As one who couldn’t even afford to file bankruptcy I must say that the credit card companies actually make tons more money off the poor than the rich because the poor carry a balance over into the next billing cycle and pay high interest and fees.  The poor pay usurous interest rates on small amounts of debt more than covers the bankruptcies of the rich whose “good credit” allows them to get back into the game after filing. They are even considered great risks because they are no longer liable for past debts freeing up all their income to pay new bills. It is a shame that the bill actually discriminates against poor creditors over the rich who actually play the system and are protected by their ability to hide their income in expensive luxuries as the article suggests. It is well known how credit card companies actually build into to their profit calculations a certain amount of bankruptcy anyhow.  They push credit on people with this in mind and further begin to share credit information with preditory merchants in order to boost the poors’ buying habits luring them into a kind of debt trap. This bill is just another way in which the poor in America are getting the shaft.

  Posted by cabdriverinchicago on Jun 19, 2006 at 6:29 AM

  The final report of the Council on Foreign Relations portends a grim blueprint for the 21st century: grim, that is, for “We the People”  but ensures the moneyed power elite finally have attained their “promised land”.

  From what I have been following, a destructive bankruptcy law - destructive in that it is in place to ensure an average person’s financial decline is a permanent one - will create a population of “the desperate and needy”.

  The wretched bankrupcty law is just one of a well-thought out series of nails-in-the-coffin to ensure the removal of any semblance of a class other than the very desperate,the very needy and the very rich.

  The final plan, as the just released CFR report states, is to remove the sovreignty of the three countries of North America - the US, Canada and Mexico. One of the architect’s of the final reports - Robert Pastor’s August 2001 book - of which the final CFR report is just a watered down version - does indeed state the only problem standing in the way is “the people’s” pesky attraction to their “sovreignty”, you have to realize that it is not in their best interests to have any class except the very rich and the very poor.

  The CFR final report is must reading to context the bankruptcy law’s true intent, and exactly why it appears “a shambles”. It is a shambles ONLY if we think a fair bankruptcy law was their true intent.

  The CFR final report should send chills down every American person’s spine - the next step is eminent domain. If we think the days of land-grabbing robber-barons are over, we haven’t seen anything yet.

  If we think the US army will not be deployed to walk in and get us out of our generationally held homes, think again: it is happening as of this writing in Colorado for one, Utah as well, and next down to Texas. Those who have stock-piled weapons “to fight to the death”, have eventually been physically removed from their property, with rifles in their hands.  What then happened to their homes? It will make you sick, but you need to pay attention there. Some of these poor people declared bankruptcy after being forced off their homes and compensated a rude tuppence for their real estate ... guess what happened to them… and guess who now owns their land and homes?

  The private-public institution/enterprise structure has been identified and is being put in place and vested with powers to carry this out. They ended up owning the homes.

  If we think the bankruptcy law will be “fixed” forget it, short of another American Revolution start saying goodbye to everything America used to stand for.

  So the final report (“solution”?)is to be read as a huge red flag of a very nasty program unfolding about our disbelieving eyes.

  I hope In These Times will do a series of exposes on this, and link that “CFR final report” with other “nails in our coffins”, such as the shambles at our borders, the shambles of our foreign policy, the shambles homeland security is in, the shambles of our tax law, in fact the shambles of all our systems from education, health care, insurance and the drug laws and prison systems.

  One would think with all these shambles we are a nation of complete idiots, instead of a nation that is blind or paralyzed in terror and disbelief of the ultimate blueprint unfolding.

  Anna
  Ex. American Express Quantitative Analyst, Marketing Dept
  who knows a bit too much about what credit in the uS was all about.

  Posted by annarovita on Jun 19, 2006 at 4:34 PM

  This is very over the top Anna.

  I should have protested when you made a big mis-statement in your first comment:  “THIS group of [ wealthy] repetetive filers were the ONLY group actively sought out by credit card companies to reissue cards. ”  Almost all credit card companies actively solicit people right after bankruptcy.  Poor or not, their mailboxes overflow.  What you say isn’t true but I thought perhaps it was just mis-communication.  You said you used to work in the industry.  You might know something I don’t ... but this last post isn’t reality.

  Any fair reading of the new law makes one start thinking of the phrase “indentured servitude.”  But conscious and aggressive creation of an under-class?  You give the greedy too much credit, and you scare yourself when you could be doing some good.

  Posted by Meghan on Jun 19, 2006 at 7:24 PM

  Do I give the greedy too much credit? No, IMO I give them too little credit for the Machiavellian reality they repeatedly create. It is quite masterful, the reason why there are so few whistleblowers on all this, is the most masterful of all. If I had a penny for every banking executive who said “Anna this is so *criminally* wrong, but I have a family at home… and these people have more ‘money than god…” I’d be quite wealthy. Eventually we’ve all become their enablers of those in the power-elite who are indeed criminally “over the top”. 

  I have eyes wide open to the depth of mischief the power elite has wreaked on the backs of the middle and lower class these past 50 years.  I have also had access on Wall Street - from not only within the consumer credit policy making divisions, but also the top banking arenas that participate in setting Credit and Money policy worldwide. So, I think I am qualified to assess “over the top”.

  On my radio segment, I have people from all over the United States in absolute anger from their specific run-ins with “the shambles” - telling me not to give more examples of how “over the top” it is, they know first hand, but what they can do about it.

  There are about a dozen sterling investigative reporters on the matter of global financial systems and the machinations of the power-elite behind it.  I found it very educational to speak with them - to vet all this. They come from all dimensions of the political spectrum. They have written books, many best sellers on what really runs the global financial and power structures, and what it is leading to. They all say the same thing.

  One might ask them if what I have put here is over the top. I have passed this link to a few of them and those I have heard back from have stated that responses like this, drive *their* frustration over the top, “so many people do not see it coming and deserve the country they get”.

  For instance, the people who were ousted from their homes by the military recently in Colorado - who are quite easily found through various internet sites protesting those “robber baron raids” -  if anyone has lived through “over the top” and earned the right to use that phrase, they have.

  So, please do READ the CFR final report, and the Pastor book, Pastor being a contributor to that final CFR report.

  Anna

  Posted by annarovita on Jun 20, 2006 at 4:56 PM

  I will stop with this train of thought after this comment, and even let Anna have the next and last word, but if Anna and her experts think that people like me are the problem then I repeat my judgment:  This paranoid line of thinking is over the top and not helpful.

  Posted by Meghan on Jun 20, 2006 at 5:20 PM

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