Wednesday, March 02, 2005

Feed the Children, or Gorge the Credit Card Companies

After passing legislation to benefit companies targeted by class action lawsuits (those pesky lawsuits where a large number of public citizens are injured and need legal representation against large companies), our representatives are considering laws limiting bankrupcty.

In effect, it would give credit card companies the same protection as child support payments.

Call me naïve and presumptuous (and many might call me worse) but I'm going to assume that when I pay credit card fees and interests I am paying into the following factors:
  1. Others have declared bankruptcy and the loss needs to be recuperated
  2. The risk that I will declare bankrupcty must be part of the fees I pay
  3. If I declare bankruptcy, my increased interest rate covers part 2 for the far future when I might do it again and covers some of my presumed "lost debt"
Now - that's how I would do it, and I haven't heard of these companies falling on hard times. Anyone who has declared bankruptcy will tell you the first pieces of mail they get - credit card offers.

Typically, you get few protections when you file for Chapter 7. Federal student loans and child support are two.

So who are these people shirking their personal responsibility? Reports over the past couple of years indicate that as many as half of them are due to accumulated medical bills.

More on their profile after bankrupcty:
His report shows that during the two years prior to filing for bankruptcy:

  • 40% lost telephone service
  • 19% went without food
  • 54% went without needed doctor or dentist visits because of cost
  • 43% did not fill prescriptions because of cost
  • 15% had taken out second or third mortgages to pay for medical expenses
  • 1/3 continued to have problems paying their bills following
    bankruptcy, including paying their mortgage/rent and utility payments
  • Even after filing for bankruptcy a number (3.1%) were turned
    down for jobs, 5% were turned away on apartment rentals, and 9% were
    rejected for car loans
Doesn't quite sound like a free ride. And some might recall the economic crash and the loss of jobs as a national problem.

The response from our legislature is to protect the credit card companies as if they were a child. So now, while continuing to spiral downward or struggle upward, folks can shore up even more profit for credit card companies.

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