Brownwood, Bankruptcy & Politics
All roads lead to Brownwood and the Republicans are Driving........
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Dallas Morning News Editorial
Balance Due: Bankruptcy bill is too tough on borrowers
10:57 PM CST on Monday, March 7, 2005
Q: What do you call a Congress that blames profligate consumer spending for the nation's soaring bankruptcy rate yet shows little concern about its own deficit-spending ways?
A: Hypocritical.
It doesn't take much for someone to land in bankruptcy court. A lost job, a divorce, catastrophic medical costs and, of course, irrational credit card use could do the trick.
But not all bankruptcies are created the same, and that fact is missing in the Senate bill now moving through Congress. The Senate measure would set up a rigid means test to make sure that debtors who can pay do so and would greatly reduce the discretion of bankruptcy judges.
In principle, borrowers ought to honor financial obligations. This bill, however, bails out aggressive lenders and treats hardworking, financially distressed Americans as deadbeats. Credit card debt has climbed over the past decade, with senior citizens, middle-class families and minimum-wage earners making up a growing percentage of the insolvent. Other studies link personal bankruptcies to medical setbacks and the absence of affordable medical insurance.
Most of these aren't professional deadbeats; they're average people who have fallen on tough times.
Responsibility works two ways. In an era of easy credit, lenders share blame for personal bankruptcies. Industry practices such as skyrocketing penalties and fees – the fastest-growing revenue source for credit card companies – increasingly mire borrowers in debt.
Bankruptcy is a serious national problem. But before Congress changes the laws, lawmakers should ask themselves whether they could meet such an inflexible standard.
Just look at the federal budget, and you have your answer.
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