Copyright 2002 The Houston Chronicle Publishing Company
The Houston Chronicle
May 29, 2002, Wednesday 3 STAR EDITION
SECTION: A; Pg. 22
LENGTH:
554 words
HEADLINE: POLITICAL USURY;
Stick to the
point on overdue bankruptcy overhaul
SOURCE: Staff
BODY:
A bill that would make it more difficult for
debtors in over their head to get out from under creditors, after five years of
debate, has stalled again on Capitol Hill, which is not surprising considering
how complex, fiscally and philosophically, the bankruptcy issue
is. But this time the snag is, ludicrously, over abortion, an
issue that has as much to do with bankruptcy reform as having
credit cards has to do with having money.
Members of a House-Senate
conference committee got tied up over a proposed provision to prevent
abortion protesters from using bankruptcy to
avoid paying court-ordered fines and civil judgments owed to clinics they
harassed. Lawmakers argued the matter based on their views on abortion. The
now-stalled legislation would have channeled more debtors into Chapter 13
bankruptcy, which requires that creditors be repaid under court-approved
reorganization plans, rather than into Chapter 7 bankruptcy, which relieves
hopefully contrite consumers from impossible debt loads after liquidating their
assets.
Critics contend the means test to decide who could file under
which section of the code favors the wealthy: the rich could avoid Chapter 13 by
hiring more skillful lawyers; means testing, even by the very wealthy, is
avoided if debts are business-related; and bankrupt large companies would not
face new burdens proposed for imposition on failed small businesses.
Americans are of mixed views on bankruptcy.
Fairness would seem
to dictate that people who lose their job or can't repay bills for needed
medical treatment but who otherwise live within their means deserve a chance at
a fresh start through debt elimination. And parents seeking child support should
not have to compete with credit card companies for the assets of a cash-strapped
noncustodial parent, as the bankruptcy bill would have it.
Meanwhile,
spendthrifts who run up huge credit card bills so they can eat at fancier
restaurants than their paychecks alone would allow perhaps ought have current
law tightened to prevent their walking away from their obligations.
Or
maybe the banks, credit card companies, retailers and auto lenders ought to
suffer the consequences of their shamelessly predatory lending practices, which
include lowering minimum monthly payments to inflate interest due, tempting poor
risks with easy credit, enticing the unsophisticated or elderly into home
mortgage refinancings, offering expensive loan consolidations to the desperate,
bombarding consumers with solicitations for credit cards and cash advances,
offering deceptive "teaser" interest rates and frequently raising credit limits.
Tellingly, the banking industry has fought indefatigably against every
effort to get them to tell customers exactly what it costs to carry a balance. A
watered down proposal that managed to make it into the bankruptcy reform bill
was dropped last year.
It's no wonder that the average household has $
8,367 in credit card debt, according to the research firm CardWeb.com. And while
no one forces consumers to overspend, irresponsible lenders shoulder some of the
blame for increasing numbers of loan and credit card defaults.
With so
many relevant issues to debate, it is remarkable that the
bankruptcy overhaul bill has stumbled over a fight about, of
all things, abortion rights.
TYPE: Editorial Opinion
LOAD-DATE: May 30, 2002 
