Bankruptcy law needs allowance
Article from the Herald
It is perhaps cruel irony that at the end of a week in which the misnamed federal "Bankruptcy Abuse Prevention Act" went into effect, many ordinary people - including those prone to bankruptcy - watched to see what sort of havoc another major hurricane might bring.
Indeed, more than half a year after the legislation was signed into law, the images and stories of heartache from natural catastrophes Katrina only serve to magnify the bill's shortcomings. While no one is denying that widespread credit card and bankruptcy abuse occur, the new law is far too punitive on those who can least afford to pay.
This latest chapter of what some might call "compassionate conservatism" is neither compassionate nor conservative. It makes it much more difficult for consumers to seek protection by filing "Chapter 7" bankruptcy, hitting hardest the working poor and those who have lost everything, while doing nothing at all to address fraudulent business bankruptcies. Essentially, the new law is Christmas come early for credit card companies, which have long lobbied for such "bankruptcy abuse" legislation.
This even as they became less and less responsible in their predatory lending practices, offering credit card accounts to persons whom they knew to be at-risk of ever paying off their bills. These include single moms working two jobs to feed young, and often sick children, and working-class college freshmen already borrowed to the hilt just so they can take on a normal load of classes.
As Hurricane Katrina taught us, the new law also hurts those who've been made more vulnerable simply by being caught in a bad place. The law effectively knocks the last leg from under a table where families, in some cases, have already lost three. As Rep. Bill Pascrell Jr., D-Paterson, wrote in an Oct. 16 Herald News commentary, efforts to exempt victims of natural disasters from the new regulations were rejected in Republicans' rush to pass the bill.
"How coarse have we become if we automatically presume impropriety against a Katrina survivor who needed cash during this time of need?"
Pascrell's point is a good one. We might grant Congress the benefit of the doubt for not including some sort of natural disaster consideration to this legislation as it was originally drafted last spring. Yet it is not too late to revisit the issue, to make it more just, by bringing to vote an updated, alternate bill to remedy this huge oversight.
Given the daily reminder of what has become a longer and longer Atlantic hurricane season, and given North Jersey's recent array of problems dealing with damage wrought by recent flooding, it should become clear enough that natural disasters cause enough turmoil on their own. Those who are victims of such disasters, essentially those caught in the wrong place at the wrong time, shouldn't also, at their greatest hour of need, become victims of a heartless and thoughtless government.
