Redstate

Taking someones house to pay their bills because they have gone into bankruptcy due to illness or an ill spouse or child is immoral, wrong, unChristian and unAmerican.

People should take responsibility for their spending, but credit card companies should take responsibility for their lending.  If you need to charge someone 30% interest on a credit card, you should not risk loaning money to them, and if you do, you should take responsibility for it when they ineveitably don't pay you.  

This bill is payback to special interests and big donors.  And another reason why you can't trust politicians to do what's right for the people.  Notice they only made rules for personal bankruptcy not for businesses.  Also the exemptions for the wealthy who invest their assets in homes in other states, Fl and Tx really begs the question who looks out for the little guy anymore?

I'm planning on doing a more in-depth review of the bill when/if it passes and we get more objective information on the changes but my initial impression (based on the criticisms) is that it probably doesn't do enough to stop some wealthier debtors from shielding their assets in a homestead or a trust.  Then again, considering how the opposition tried to put in non-germane riders regarding the minimum wage or abortion protesters in the bill, it could turn out that these criticisms were overblown much like the patently false claim that a majority of bankruptcies are caused by medical bills.

I favor requiring people to honor their contracts and pay their bills.  The focus of the bill seems to be on getting more debtors who wish to file bankruptcy to file Chapter 13 and repay their debts after they've been restructured rather than discharge them under a Chapter 7 filing.  It also seems to require debtors to use more of their assets to pay off their debt which is also a good thing.  On balance it seems a move in the right direction.

"Illness begot financial problems both directly (because of medical costs) and through lost income. Three-fifths (59.9 percent) of families bankrupted by medical problems indicated that medical bills (from medical care providers) contributed to bankruptcy; 47.6 percent cited drug costs; 35.3 percent had curtailed employment because of illness, often (52.8 percent) to care for someone else. Many families had problems with both medical bills and income loss."

http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.63/DC1

NRO said:

"Maybe that's why only 28.3 percent of the surveyed debtors themselves agreed with the authors that their bankruptcy was substantially caused by "illness or injury." The rest put the blame elsewhere, even when the study labeled their problems as at least in part "medical.""

Ok.  If its only a third of bankruptcies that are caused by medical costs and illness related loss of work I don't think these particular bankrupts need laws restricting their access to bankruptcy protection.

By the way, The title of the study is "Illness And Injury As Contributors To Bankruptcy".  NOT the patently false claim that "a majority of bankruptcies are caused by medical bills."

See the difference?  It's an analysis of the contribution of illness and injury to bankruptcy.  Yes in some cases illness and injury were minor contributors.

Instapundit voices the real problem with this bill better than me

"BANKRUPTCY "REFORM:" I'm deeply skeptical of the bankruptcy bill in front of Congress now, and this report on credit-card industry practices goes a long way toward explaining why.

http://www.washingtonpost.com/wp-dyn/articles/A10361-2005Mar5.html?sub=A...

Credit extended to people who can't handle it, absurd hidden fees, high interest rates, etc.: There's a lot of scamming here. The argument, of course, is that people who sign up for credit card accounts ought to know what they're getting into. But shouldn't the companies that extend credit to people who obviously can't handle it be held to the same standard?"

http://instapundit.com/archives/021597.php

why take the risk of starting a business? Its the option of bankruptcy that makes it palatable. This bill eviscerates the engine of American innovation. Clearly our corporate masters prefer we all work as non-union labor at Wal Mart.

do any of the things you claim. All it does is eliminate a dodge some people have used to avoid paying debts.

Bankruptcy wasn't designed to let people avoid debts.

for people who have been profligate with the credit cards to renege on their debts also make it more difficult for them to start businesses?  Entrepreneurship requires the sort of financial discipline that many chapter 7 filers obviously lack.  Not to mention the lack of integrity that would allow one to commit de facto theft under cover of bankruptcy court.

Americans.The Schumer Amendment which would have limited asset protection trusts, you know the little trusts where the truly comfortable can stash their assets safe and sound from bankruptcy creditors was rejected, so the protections for the wealthy Americans to avoid their creditors STANDS FIRM. BTW, The 5 states that allow Asset Protection trusts are Alaska, Delaware, Nevada, Rhode Island and Utah - these states have passed legislation exempting assets held domestically in such trusts from the federal bankruptcy code. People who want to establish one of these trusts do not have to reside in any of the five states; they need only set it up through an institution located there.

The Senators rejected limiting this little loophole for their own class.  Seems personal responsiblity is a virtue best mandated for the underclass.

Unless Chuck Schumer does the heavy lifting we're all goners.

Nice to know.

you would like draw from that bit of Congressional hypocrisy then I am glad that the truly comfortable have you on their side.

The incentive is making lots of money. That's what makes it palatable.

are already exempt from b/r discharge, depending on the date of the transaction and/or the nature (i.e. cash advances). As in all other legislation, just follow the money--here in the form of campaign contributions---to see who the beneficiaries are. This bill is for the benefit of credit card companies who are not satisfied with the profits they currently make. I'm reminded of sport franchise owners who resort to lockouts, etc to protect themselves from themselves.

to kill a pigeon in a flock of song birds. Clearly, there are better ways to do this if they really were interested in stopping unnecessary bankruptcies.

Sure, make it difficult for the guy who has 10 credit cards and uses them until they're max'd and then declares bk.  But why not put some qualifiers for those who really are victims of bad luck like cancer at 35 and who would turn back into responsible tax payers when they're back on their feet.

It's not very fiscally responsible is it to take so many good tax payers out of the market just to get a bunch of slackers looking for a free ride.

They know who these people are before they give them credit cards so who's really at fault here?

Please contact your senator (http://www.senate.gov) and let them know about how you feel.  They're voting today (I think).

People who are hit with cancer and are faced with unbelievable bills shouldn't have to think: "hmm, I can't pay for this, so should I die instead?".  

Sorry to be religious here, but, as a Christian, this bill is an outrage.  One of the amendments to this bill was to exempt those who are declaring bankruptcy due to medical catastrophes and this amendment was voted down.  

This can happen to any of us.  We never know when we'll be hit with an illness.  

and responsible also have me on their side.

The fundamental flaw of the bill is that it fails to distinguish between cheats and victims of catastrophic events. All of us probably think spendthrifts who want to walk away from their obligations should be required to make good on their debt. But this bill does not recognize that other bankrupts genuinely need protection from creditors so that they can get their lives back on track after a disaster of some kind.

I believe people should have some protections from their creditors in these cases. The community and the state have an interest here in fairness and in helping people become produtive members of society again. Penalizing such folks on top of the catastrophe they've sustained is mean, short-sighted, greed-driven and does a disservice to society.

When you consider that the bill also does nothing to address loopholes available to large corporations and high net worth individuals who can set up protected trusts to protect their assets, the bill can be seen as immoral as well.

I'm afraid we'll reap the whirlwind on this one.

disestablish bankruptcy courts?

that it reduces the discretion available to judges to distinguish between hard-luck cases and jerks, by imposing means-testing based on median income.

and maybe I just didn't get enough love as a kid or something but I don't see why making a hospital or medical center suck up the loss from a bankruptcy is such a righteous action.

So I guess this is one conservative jihad I'm not enlisting for.

I would point out that having persons "pay their bills" is not a bad thing, but to equate a credit card company with a small business lender is absurd.  If I am to lend money to another, it involves risk for which I will charge interest.  It is my duty to perform due diligence to make sure I am not taking a risk out of proportion to the rate I am charging to compensate for said risk.  I , as a Federalist society president conservative, find this bankruptcy reform bill fraudulent in that it talks of "responsibility" yet seeks to absolve the LENDER of the downside of lazy business decisions.  Due diligence?  Ha!  Send out pre-approved solicitations by the bus load!  And if they turn out to be bad risks - Well then pay off congress to pass a law stating you don't have to suffer from your asymetrical decision to lend to the marginal borrower.

Perhaps a law should be passed that prohibits a lender from using this law (a social construct outside of the "contract") to earn more than what the law is "intended" to prevent - undue suffering on the part of credit card companies from bankruptcy fraud.

Honestly, this law will not hurt me.  However, I find it the height of irony that conservatives should champion "paying your bills" while they spend spend spend money they do not have at the Federal level.  And I am a hard core conservative.  But go ahead, sow the wind.

Honestly, this law will not hurt me.  However, I find it the height of irony that conservatives should champion "paying your bills" while they spend spend spend money they do not have at the Federal level.  And I am a hard core conservative.  But go ahead, sow the wind.

Honestly, will you hold your representatives accountable for this bill?

Harvard's study isn't quite what it proclaims to be, but nor does it make the "patently false claim that a majority of bankruptcies are caused by medical bills."  As usual, one is best to rely on the source, rather than Mr. Winston's intermediary - the NRO.  One can choose to define a "medical bankruptcy" however one wishes, but when 28.3% of those surveyed report "illness or injury" as the specific cause of bankruptcy, and nearly half (46.2%) reported a "major medical cause" of their bankruptcy, we can do better than "patently false claim".  The actual results are reason enough to discuss the study's implications on the bankruptcy bill, not dismiss them.

A "major medical cause" of bankruptcy includes:

-Illness or injury listed as a specific reason for bankruptcy

-Uncovered medical bills exceeding $1,000

-At least two weeks of work foregone due to illness/injury

-Mortgaged home to pay medical bills

Deadbeats indeed.

Amen. Liberal Democrat