Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
DOUBLE YOUR DONATION!
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. A generous donor is matching all donations of $100 or more! So please donate now to double your punch!
FacebookTwitterGoogle+RedditEmail

The Politics of Bankruptcy

When the current Congress convened last year there were lots of promises to curb predatory lenders that peddle credit on outrageous terms to poor, elderly and unsophisticated borrowers.

Not only is Congress reneging on its promises, but it is rushing to reward the lenders whose scams have devastated low, moderate and middle income families and forced many into foreclosures and bankruptcies.

Congress’ gift to the predatory lenders is a scam artists’ dream under the guise of “bankruptcy reform.” The sponsors hope that this “lenders’ relief” bill can be shoved through Congress in the last days of the session–before the American public realizes its elected representatives are rewarding the banks, credit card companies, finance companies and other financial corporations which have provided the Congress nearly $30 million in campaign contributions to promote “bankruptcy reform” in recent years.

The financial industry–along with its allies like gambling casinos and car dealers–are attempting to convert the nation’s consumer bankruptcy law–which has served consumers and business well for decades–into a punitive debt collection enterprise which will keep hard-pressed consumers in what amounts to “debtors’ prisons” for years.

The lobbyists for the credit merchants have consistently resorted to the tactics of the “big lie” with claims that the long-standing consumer bankruptcy protections are being abused by “dead beats” attempting to escape their debts. The hard facts gathered from surveys of bankruptcy filings show that 90 percent of all bankruptcies are triggered by the loss of a job, high medical bills and divorce.

Bankruptcy law always has been based on the principle that debtors facing impossible financial situations be given an opportunity for a new start–a second chance–to regain their role as productive citizens rather than being thrown on a human trash heap to satisfy the demands of the creditors.

Not only is this sensible and humane for the family trapped in unforeseen financial troubles, but it makes the utmost economic sense for local communities and the nation as a whole. Crushing families through a harsh bankruptcy law means more people on welfare rolls, off tax rolls and dependent on already hard pressed local charities.

Congressional supporters of the repeal of bankruptcy protections know quite well that many of the money problems faced by families today are the result of runaway credit card schemes of the past decade which have duped so many unsuspecting consumers. Credit card offers have filled mailboxes with come-ons of easy credit. Introductory offers of a low interest rate are quickly converted into double digit charges plus a mounting list of fees. As the card holder falls deeper into debt, the card companies continue to up the ante by offering bigger and bigger credit limits. Ultimately, the consumer is sucked into cascading debt multiplied by high interest rates and hidden and deceptive charges and fees.

And Congress–now so anxious to enact a punitive consumer bankruptcy law–has consistently rejected efforts to reign in credit card abuses. Instead, they want to punish the poor to bail out the credit pushers.

Congress’ timing adds an extra note of cruelty to the conversion of bankruptcy into a punitive anti-consumer device. Thousands of workers are losing their jobs, savings and pensions as a result of fraudulent management at Enron, WorldCom and other large corporations. Many of these workers are left with only a few hundred dollars in the bank, no jobs and facing outlays for mortgages, education, transportation and other necessities in an economy where unemployment is at six percent and rising.

Members of Congress have turned out reams of news releases and uttered thousands of words of lament about the workers caught in the whirlwind of massive corporate fraud. But, now many of these same Congressmen are ready and willing-and anxious-to enact a bankruptcy law which will truly clobber these same workers. Next time you hear your Senators and Representatives express sympathy for the victims of corporate fraud, ask how they voted on the repeal of consumer bankruptcy protections.

And you might ask them how they justify shredding consumer bankruptcy protections while leaving corporations free to continue to avail themselves of an easy route through bankruptcy, shedding investor equity and reorganizing as viable companies. An soft easy landing for corporate bankruptcy versus a harsh punitive rocky route for consumer bankruptcy-an atrocious double standard.

How serious is Congress about protecting citizens against corporate excesses and unfair, unscrupulous and deceptive lending practices? The vote on wiping out consumer bankruptcy protections will come up in both the Senate and the House of Representatives in September. It will be a major test of Congress’ ability to summon the courage to stand up to the massed lobbying forces of corporations. Forget the well-honed news releases and speeches-watch for the actual vote of your Senators and Representatives–for or against repealing protections for consumers on bankruptcy. This will be the hard telling evidence of who your elected representatives really represent in Washington. New Print Edition of CounterPunch Available Exclusively to Subscribers:

War Talk As White Noise: Anything to Get Harken and Halliburton Out of the Headlines; First Hilliard, Then McKinney: Jewish Groups Target Blacks Brave Enough to Talk About Justice in the Middle East; Intimidation is the Name of the Game; Smearing “Insane” McKinney As Muslims’ Pawn; The Missing Terrorist? Calling Scotland Yard: “Where’s Atif?” They Never Booed Dylan!: Tape Transcript Shows Famed Newport Folkfest Dissing of Electric Dylan Not True. The Catcalls were for Peter Yarrow! New Shame from the Liffey Shrike

More articles by:

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

October 22, 2018
Henry Giroux
Neoliberalism in the Age of Pedagogical Terrorism
Melvin Goodman
Washington’s Latest Cold War Maneuver: Pulling Out of the INF
David Mattson
Basket of Deplorables Revisited: Grizzly Bears at the Mercy of Wyoming
Michelle Renee Matisons
Hurricane War Zone Further Immiserates Florida Panhandle, Panama City
Tom Gill
A Storm is Brewing in Europe: Italy and Its Public Finances Are at the Center of It
Suyapa Portillo Villeda
An Illegitimate, US-Backed Regime is Fueling the Honduran Refugee Crisis
Christopher Brauchli
The Liars’ Bench
Gary Leupp
Will Trump Split the World by Endorsing a Bold-Faced Lie?
Michael Howard
The New York Times’ Animal Cruelty Fetish
Alice Slater
Time Out for Nukes!
Geoff Dutton
Yes, Virginia, There are Conspiracies—I Think
Daniel Warner
Davos in the Desert: To Attend or Not, That is Not the Question
Priti Gulati Cox – Stan Cox
Mothers of Exiles: For Many, the Child-Separation Ordeal May Never End
Manuel E. Yepe
Pence v. China: Cold War 2.0 May Have Just Begun
Raouf Halaby
Of Pith Helmets and Sartorial Colonialism
Dan Carey
Aspirational Goals  
Wim Laven
Intentional or Incompetence—Voter Suppression Where We Live
Weekend Edition
October 19, 2018
Friday - Sunday
Jason Hirthler
The Pieties of the Liberal Class
Jeffrey St. Clair
A Day in My Life at CounterPunch
Paul Street
“Male Energy,” Authoritarian Whiteness and Creeping Fascism in the Age of Trump
Nick Pemberton
Reflections on Chomsky’s Voting Strategy: Why The Democratic Party Can’t Be Saved
John Davis
The Last History of the United States
Yigal Bronner
The Road to Khan al-Akhmar
Robert Hunziker
The Negan Syndrome
Andrew Levine
Democrats Ahead: Progressives Beware
Rannie Amiri
There is No “Proxy War” in Yemen
David Rosen
America’s Lost Souls: the 21st Century Lumpen-Proletariat?
Joseph Natoli
The Age of Misrepresentations
Ron Jacobs
History Is Not Kind
John Laforge
White House Radiation: Weakened Regulations Would Save Industry Billions
Ramzy Baroud
The UN ‘Sheriff’: Nikki Haley Elevated Israel, Damaged US Standing
Robert Fantina
Trump, Human Rights and the Middle East
Anthony Pahnke – Jim Goodman
NAFTA 2.0 Will Help Corporations More Than Farmers
Jill Richardson
Identity Crisis: Elizabeth Warren’s Claims Cherokee Heritage
Sam Husseini
The Most Strategic Midterm Race: Elder Challenges Hoyer
Maria Foscarinis – John Tharp
The Criminalization of Homelessness
Robert Fisk
The Story of the Armenian Legion: a Dark Tale of Anger and Revenge
Jacques R. Pauwels
Dinner With Marx in the House of the Swan
Dave Lindorff
US ‘Outrage’ over Slaying of US Residents Depends on the Nation Responsible
Ricardo Vaz
How Many Yemenis is a DC Pundit Worth?
Elliot Sperber
Build More Gardens, Phase out Cars
Chris Gilbert
In the Wake of Nepal’s Incomplete Revolution: Dispatch by a Far-Flung Bolivarian 
Muhammad Othman
Let Us Bray
Gerry Brown
Are Chinese Municipal $6 Trillion (40 Trillion Yuan) Hidden Debts Posing Titanic Risks?
Rev. William Alberts
Judge Kavanaugh’s Defenders Doth Protest Too Much
FacebookTwitterGoogle+RedditEmail