Bankruptcy reform fails to address debtor issues
An inherent flaw in capitalist democracies is that their elected leaders are almost always a part of the upper socioeconomic class. The problem becomes serious when the target of their legislation is the poor.
Such is the case with the bankruptcy reform bill, which is likely to pass in the next few weeks.
It should be no surprise that many of our leaders are wealthy. A capitalist system tends to reward its wisest citizens, and we need all the wisdom we can get in Washington.
Even the rare legislator without accumulated wealth makes about $158,000 a year.
The bankruptcy bill makes several changes that, to a well-paid legislator with a well-paid staff, seem trivial.
To a single mom with children they are not trivial. To a laid-off factory worker without a high school diploma they are not trivial. To an uninsured family with a sick child they are not trivial.
The bill requires debtors to go through credit counseling as a prerequisite to bankruptcy. It requires debtors to file new documentation with the bankruptcy court. It will cause many debtors to lose their cars. It prevents debtors from keeping some household furnishings. It will double the debtor's legal fees.
Three area legislators — U.S. Sen. Richard Shelby, R-Tuscaloosa, U.S. Sen. Jeff Sessions, R-Mobile and U.S. Rep. Robert Aderholt, R-Haleyville, are on record supporting the creditor-friendly bill. U.S. Rep. Bud Cramer, D-Huntsville, had still not decided as of Tuesday.
The most innocuous of the changes, filing additional documentation is illustrative.
Let's take a single mother with two children in school and employment as a factory worker. Precisely how, and when, should she make copies of documentation for submission to the court? She does not have a copying machine. She has to rush to get her children to school if she is to get to work on time.
Her children come home to an empty house in a bad neighborhood. She has to miss work for four different parent-teacher conferences a year if her children are well behaved, many more if they are not.
She has to miss work or neglect her children if they get sick.
Her car breaks down a lot. She can't find a copy machine available in those few minutes a day when she is not working or feeding her children or helping them with homework.
For wealthy legislators, personal debt is often a one-issue problem.
For most of their constituents, however, bankruptcy is the last step in a downward and overwhelming spiral. Debt means insecurity and fear, guilt and agitation. It sometimes means suicide.
There are those who abuse the system. If we can stop abuse without increasing the burden on honest debtors, great.
If not, we need to leave the system alone.