Tuesday, January 17, 2006

bankruptcy

Credit industry types scoffed and said most bankrupt cases were a bunch of freespending, living-large never-do-wells who entered lightly into bankruptcy to fund their carefree spending sprees. Well, thirteen weeks after the new law went into effect making bankruptcy more difficult and mandating credit counseling sessions, this credit counseling agency has gathered some data.

We see that in fact, most people who come to them have little choice but to file for bankruptcy, and have not gotten to this point by buying expensive cars and the latest fashions and vacationing in Vegas and Paris, but have had medical emergencies, lost jobs, been defrauded, etc. In other words, they have encountered legitimate emergencies and only then have they been driven to considering bankruptcy. Of the people who came for credit counseling, only 4.5% even qualified so far for debt management plans, and 0.1% have signed up for one.

Corporate America seems surprised. Really, most Americans aren't deadbeats, which makes the draconian tightening of the bankruptcy laws for individuals unnecessary and unfair.