My Favorite Business Resources
- Cheap Business Phone Service - Make phone calls anywhere for free or darn close to it.
- Cheap Printing - Always amazing deals on cheap printing with loads of free items.
- Manage Mobile Phone Costs - Great phone for controlling cell phone costs for business or teenagers.
- Really Good Web Hosting - As bullet proof as there is. A strong hosting provider with all the resources you need.

My Favorite Credit Resources
- Consolidate Your Debt - One monthly payment. Stop collection calls.
- Help Budgeting - Online and easy.
- Lower Your Car Payment - Refinance to reduce your monthly payment.
- Credit Report / Credit Score - This consolidated report is better than most.
- Credit Cards - Find the best card for you for low rates, balance transfer, credit rebuilding and rewards.

Apr

2008

Bush Bankruptcy Law Treats Broken Consumers Badly

Posted by Steve Rhode as Uncategorized

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I love to get questions from readers. So if you have one, send it in online here.

Jacques writes in to ask:

Q: Aren’t today’s bankruptcy laws (courtesy Bush administration) a fierce obstacle to personal bankruptcy?

A:
Jacque, During my many years in Washington I did what I could to fight against bankruptcy reform. There was just no use for it except to benefit creditors.

Bankruptcy reform legislation did not one damn thing to provide people like you and others with one new bit of hope or help in the face of financial troubles.

So let’s see what the new law did do:

Required consumers to have to go through pre-bankruptcy counseling. Worthless and an added expense in time, inconvenience and money.
Made the bankruptcy process more administrative and more of a liability for bankruptcy lawyers and as a consequence, more expensive for consumers.
Attempted to benefit creditors by cramming down lives of filers into government complaint expense tables to enable more money to be sucked from the pockets of consumers in difficult times. However, this has proven to be highly ineffective as default rates are so high because consumers are pushed into non-sustainable depravation repayment plans in a Chapter 13 bankruptcy.
Was billed as legislation to catch cheats and abusers of the bankruptcy system but hasn’t because those numbers were so low to begin with.
Was wanted by creditors, not consumer advocates. But creditors have deeper pockets to pay for lobbying, most non-profits are prohibited from large amounts of lobbying or simply can’t raise enough money to lobby effectively for consumers.

We did not need bankruptcy reform, we would have been much better off without it. The legislation that needs to be passed are new opportunities and new laws that will help consumers to be able to meet their financial obligations in times of trouble in a reasonable, fair and sustainable way.

Some of the brightest academic minds in the consumer bankruptcy field have their own blog, which I read regularly. I invite anyone interested in learning more about the issues faced by bankruptcy reform and the reality of bankruptcy laws today to read and comment on the Credit Slips blog.

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Steve