Democrats & Liberals Archives

New Orleans Amendment to Bankruptcy Bill

Bush and the Republicans earlier this year pushed through (with the help of some rogue Democrats) a bankruptcy bill that was tough on poor people. It will be especially tough on the poor and tragic victims of Katrina. So, while Republicans plan to introduce a repeal of what they call the “death tax,” a group of Democrats plan to introduce an amendment to the bankruptcy bill that would ease the burden on the unfortunate victims of Hurricane Katrina. I hope Republicans exercise a little compassion and vote for it.

The Republican view of "compassion" is neatly summarize by Bush's statement in Alabama:

"The good news is -- and it's hard for some to see it now -- that out of this chaos is going to come a fantastic Gulf Coast, like it was before. Out of the rubbles of Trent Lott's house -- he's lost his entire house -- there's going to be a fantastic house. And I'm looking forward to sitting on the porch."

Who was worried about Trent Lott? Trent Lott has money. People with money were evacuated before Katrina arrived. Some with lots of the stuff, evacuated via airplanes that took them wherever they wanted to go. Others with less money, got into their cars and drove away. They were safe, out of harm.

Did anyone in the administration - FEMA maybe - worry about the people who did not evacuate? Of course, a tiny number who could get out chose not to. The vast majority who stayed, remained there because they did not have a car, had no money for gasoline or could not pay for a bus to evacuate them.

Typical Republican "compassion": Call for an "evacuation" and let everyone take care of himself.

Whatever faults you may place on the backs of Democrats, you can't say they lack compassion. Many have criticized them for too much compassion - being "bleeding hearts." The current situation, however, cries out for compassion. This is why 4 Democratic members of Congress - Jerrold Nadler, John Conyers, Sheila Jackson Lee and Mel Watt - plan to introduce legislation next week that would make it easier for victims of Hurricane Katrina to declare bankruptcy.

The need for this is great. If you remember, earlier this year, the Republicans voted for a bankruptcy bill that is good for credit card companies and banks, but not good for poor people. It was called the Bankruptcy Abuse Prevention and Consumer Protection Act and goes into effect October 17. This is just in time to pile another catastrophe upon the Katrina catastrophe the impoverished of New Orleans already face.

Do you think Republicans will vote for it? I sure hope so. It can't hurt to give your congressman and senators a nudge.

Posted by Paul Siegel at September 2, 2005 5:31 PM
Comment #77482
2005 Senate Bill 6103 (Increasing the gasoline/fuel tax to fund transportation
2005 House Bill 2304 (Recovering costs for welfare assistance)
[History, Amendments & Comments] [Text and Analysis] [Add to Watch List]
Introduced by Rep. Helen Sommers on March 24, 2005, to direct the Department of Social and Health Services (DSHS) to place liens on the property of clients who receive public assistance prior to their death, if their condition is such that they are unlikely to be discharged from a medical institution or return home. It expands the statute of limitations for the DSHS to collect overpayments and other debts due to the DSHS from 6 to 20 years.
Passed in the House (56 to 41) on April 21, 2005, recovering costs for welfare assistance. [Vote Details and Comments]
Received in the Senate on April 22, 2005.
Passed in the Senate (40 to 9) on April 23, 2005, recovering costs for welfare assistance. [Vote Details and Comments]
Received in the House on April 23, 2005.
Passed in the House (54 to 42) on April 23, 2005, to concur in Senate amendments. [Vote Details and Comments]
Signed by Gov. Christine Gregoire on May 4, 2005, recovering costs for welfare assistance.
They the republican party want money from the dead and poor
Compassion? Not in this administration. NO

Posted by: Annie at September 2, 2005 6:03 PM
Comment #77504

And they say they are for the corporations making profit, huh.

Posted by: Henry Schlatman at September 2, 2005 6:41 PM
Comment #77521


While I agree with the majority of your post (better yet if they prevented these people from needing bankruptcy somehow, but considering how things are going…), I do have to object with one thing.

“Whatever faults you may place on the backs of Democrats, you can’t say they lack compassion.”

I could say that of some Democrats, but it wouldn’t pertain to the point of this thread.

Posted by: Stephanie at September 2, 2005 7:04 PM
Comment #77560

How about keeping the bankruptcy laws the way they were—the way the founding fathers created them as a way for those who lose their way of life a chance to start over. The credit card companies and all who profit from them should
realize sooner rather than later they pay with their souls.

Posted by: L at September 2, 2005 8:08 PM
Comment #77568


You make a very good point, and it’s one I hadn’t considered. Thanks.

Only one problem, though. Since my Congressman is Jerry Nadler, I doubt that I’ll have to give him much of a nudge.

Posted by: Chuck Hanrahan at September 2, 2005 8:16 PM
Comment #77598

When our founding fathers created those personal bankruptcy laws, americans had a much greater sense of Personal ACCOUNTIBILITY, and Personal RESPONSIBILITY. They took care of themselves. They did not rest on the laurels of the government. They only declared bankruptcy when it was the last choice. Today that is not the case. People irresponsibly run up credit more than they can afford. Then, why not? Bankruptcy. And Ill Throw CHARACTER in there as well. The words you all hate.

Posted by: scottie at September 2, 2005 9:53 PM
Comment #77601


I have no problem with ACCOUNTABILITY, RESPONSIBILITY, or CHARACTER. People borrowing funds should put into practice those characteristics. However, so should the credit lenders and our government in general. Do you think checks for cash places should be illegal? I do. Do you consider that usuary, seeing as they charge up to 200% interest and possibly higher? I most certainly do. Do you think credit card companies should give $10,000 worth of credit to individuals on SSI for mental disabilities? I don’t think they should, but I know that they do, knowing they can write off the bad debt and charge outrageous interest to their other customers to pay for it.

Individuals aren’t the only ones who should be accountable, responsible, or have character. Everyone who borrows pays for those bankruptcies and money lenders take advantage of that fact and make huge profits, as “insurance” for bankruptcies and bad debtors.

Posted by: Stephanie at September 2, 2005 10:08 PM
Comment #77622

About being generous and compassionate

There seems to be a definition problem here. Can you be generous by giving away somebody elses money? Does changing a law in a way that costs you nothing and may improve your political prospects make you compassionate?

Let me put the question another way. George Bush has increased U.S. foreign aid from $10 billion in 2000 to $19 billion now. Is George Bush more generous or more compassionate than Bill Clinton? If your answer is no, reconsider your assessment of Jerrold Nadler, John Conyers, Sheila Jackson Lee and Mel Watt.

Posted by: jack at September 2, 2005 11:36 PM
Comment #77624


“When our founding fathers created those personal bankruptcy laws, americans had a much greater sense of Personal ACCOUNTIBILITY, and Personal RESPONSIBILITY.”

You make that sound as if it is solely a Democrat problem.

Let’s talk about John J. Rigas, and Ken Lay, Richard M. Scrushy and Bernard Ebbers. These guys were all rich men that got too greedy.
The reference in wikipedia from 2001 to 2005 of major companies engaged in fraud is a full page.

No sir, fraud isn’t a partisan affair.

Now to put these folks that have already suffered so much, through the horrors of bankrupcy as it is written now, would be a tragedy of Shakespereian proportions.
Everybody’s going to have to suck it up on this one.

Posted by: Rocky at September 2, 2005 11:47 PM
Comment #77637

No# 1 I didn’t even hint at the word Democrat. But the bankruptcy laws were changed because too many people were taking advantage of the system. The people of New Orleans do need the opportunity to declare bankruptcy.That is the kind of situation they were meant for. It is good to make an exception. But to go back to where it was so easy to just declare bankruptcy would be absurd. Men that get greedy in the coorporate system should be punished severely but that doesnt have anything to do with the character of those who have abused our bankrupcy system. And that doesnt mean one shouln’t have the right to earn a 7 figure income in the coorporate world when done honestly. And STEPHANIE, I hate chek cashing places too but if it were not for the irresponsibility of the people that use them they would not stay in business. But in America we have the freedome to make stupid decions like paying a 25$ fee to borrow 100$ for a week. But whereas we have the freedome to make that decision, we do not have the freedom to just expect others to pick up after our mistakes. And that brings me back to my premise. Those bankruptcy laws that “L” so wants to go back to, were created in a time when people had far different standards of responsibility. They no longer fit this time.

Posted by: scottie at September 3, 2005 1:31 AM
Comment #77649

The reason for changing the Bankruptcy Law was to protect “We the People” from those who abuse the system, not to punish citizens. Because how is it possible for a person to hold on to a Million dollar home and owe nothing to their creditor’s? True, the Law goes to the extreme in its guidelines, but considering the fact that some citizens, Rich and Poor, has used these laws to their advantage requires our Legal System to hold them accountable. Not punish those citizens who need relief because of circumstances beyond their control.

Posted by: Henry Schlatman at September 3, 2005 4:04 AM
Comment #77654

Jack, that is an excellent point. Over a period of years for comparison purposes among Presidents, dollar amounts are virtually meaningless, as inflation dictates dollar amounts increase even if the level of actual help remains the same. Plus, foreign aid has to take into account global need conditions and requirements. Bush’s military aid overseas exceeds Clintons in dollar amounts, but, considering the events since 9/11, that makes perfect sense.

Also, total appropriations figures are significantly different from U.S. Official Development Assistance (ODA) figures,[PDF] for reasons too technical to go into here.

Posted by: David R. Remer at September 3, 2005 7:06 AM
Comment #77680

What we saw on tv last week was the everyday reality faced by millions of Americans each and every day. They are ignored, cursed and thrown away by a greedy selfish society. Katrina just made it so that we, and the rest of the world could see our shame.

We refused to look at the consequences of…
-protecting the corporate predators and filetting their prey (the people)
-extravagant corporate and executive compenstaion
-shipping jobs outside the country
-denying welfare to people having even minimally adequate emergency funds
-cutting workers health benefits
-cutting hours to under 35 a wk to avoid paying benefits
-making overtime mandatory and so education while employed impossible

For decades our economic boom has been parasitic with the ‘haves’ feeding off the ‘have-nots’. The nature of humanism is there are winners and losers— only the strong survive. Shareholders win, labor loses. Last week America got a good look in the mirror and. This is the face of America the world hates.

This face is as Democratic as it is Republican. The fault for the Katrina disaster has been laid at the feet of local state and federal governement exhibiting decades of continual parasitism. Governments of, by and for the people. And their actions and behaviors accurately represent and reflect the people.

Posted by: jo at September 3, 2005 11:16 AM
Comment #77682

I am looking forward to criticizing the potential hypocrisy of passing a bankruptcy law that fails to provide relief for those of modest or poor means who face bankruptcy as a result of events beyond their control like medical bills or employment dislocation, while exempting from the law victims of Katrina who also face bankruptcy for an event beyond their control.

Posted by: David R. Remer at September 3, 2005 11:17 AM
Comment #77697
Let me put the question another way. George Bush has increased U.S. foreign aid from $10 billion in 2000 to $19 billion now.

Jack, in addition to David’s response about actual appropriation figures, a large chunk of the money you’re talking about goes to countries like Israel, Russia, Eastern Europe, and other comparably well-off countries for things like NATO compatibility.

Posted by: American Pundit at September 3, 2005 12:07 PM
Comment #77705

Stephanie brought up a good point about giving credit cards to people who can’t afford them. A generation ago, most families didn’t have credit cards, because banks were heavily regulated under usury laws.

But in 1978, the Supreme Court ruled that banks could export interest rates between states, which led to a bidding war that drove up credit card interest rates (every state wanted the banking business, and banks wanted to charge really high interest rates).

Now, even if some people declare bankruptcy, the high interest rates insure that banks don’t lose any money. That’s why, even with the rise in bankruptcy filings, the credit industry still makes record profits each year.

Just a little history lesson. A generation ago, families didn’t file for bankruptcy so much, because they just couldn’t get that far in debt. Hurray for deregulation!

Posted by: American Pundit at September 3, 2005 12:23 PM
Comment #77754

Rocky (and anyone else),

“Now to put these folks that have already suffered so much, through the horrors of bankrupcy as it is written now, would be a tragedy of Shakespereian proportions. Everybody’s going to have to suck it up on this one.”

Agreed. But, why should they have to go through bankruptcy at all? Isn’t that what all the aid is for?

I’ve never been through a natural disaster that required government aid, and I’ve never talked to someone who has about the matter. So, for anyone who knows, I ask:

Do the people who need it get the disaster relief money? If not, where does it go? If they do, then why would they need to go bankrupt?

Call me a dunce if you want, but I don’t understand this.

Posted by: Stephanie at September 3, 2005 3:20 PM
Comment #77755


Thank you for supply the facts to support my experience.

Posted by: Stephanie at September 3, 2005 3:25 PM
Comment #77776

Stephanie, only the bankruptcy courts can absolve debtors of their debts. The aid that is coming in the form of insurance, if folks even had any, and from the federal government is emergency aid to assist them with relocation, food, clothing, transportation, and eventually a permanent residence.

The Feds are not going hand out money for credit card debts and mortgages to these people just for walking in and saying, I have this much debt. First of all, creditors are going to be trying to locate the debtors. In many cases debtors are not even going to know how much they owe or to whom since their records are gone and their change of address has not been made to the creditors.

Some mechanism needs to be in place to establish and verify debt before aid can be handed out to cover it. That mechanism already exists. Bankruptcy courts and lawyers. Now, what exactly the Administration will come up with to faciliate the bringing together of creditors and debtors and verifying information, remains to be seen.

My guess at this point is the Bush administration will seek to transfer public money directly to Mortgage holders and Credit Companies based on their records of creditors who lived in the disaster area. This would bypass bankruptcy courts altogether where creditors and banks would just have to eat the loss as reduction in annual profits, and force taxpayers to pay creditors directly so they won’t have to eat the loss they would have in bankruptcy proceedings.

In other words, in a normal bankruptcy, the creditor simply writes off the debt. I think Bush is probably going to bypass that and pay the creditors directly at taxpayer expense insuring creditors don’t lose a cent. A corporate welfare move, in other words, if Bush’s record of transferring working people’s tax dollars to corporate profit and CEO golden parachutes is any indication.

Posted by: David R. Remer at September 3, 2005 4:14 PM
Comment #77786


While your words may prove true, they didn’t really answer my questions. I wasn’t talking about debit they’ve already accrued. I don’t see why that should be directly affected and thus induce more people to bankruptcy. Debts can be managed sufficiently without bankruptcy. That’s what debt counselors are for and, at least in my area, they come free of charge through the United Way for those who can’t afford such services themselves. Bankruptcy isn’t inevitable, even after such a catastrophe as this.

Posted by: Stephanie at September 3, 2005 4:29 PM
Comment #77819


Most people who lose house and home and job do not have trust funds or second homes and vacation properties to tide them over until new employment is found. Then again, most people are employed out of necessity, not to relieve boredom.

Posted by: jo at September 3, 2005 6:56 PM
Comment #77821


And how does that change my statement? I’ve been through a bankruptcy once. I married debt. I have four children and live on less than $25,000. Since my husband’s bankruptcy, of which I was included as a spouse even though none of it was mine, my husband and I have worked hard to learn fiscal responsibility. Such as how to manage debit legitimately, without resorting to bankruptcy.

My point was, any debt accrued due to the disaster should be taken care of by the aid money that is being provided, and thus they would not need to go through bankruptcy. IF that is not the way our system is set up, then that needs to be changed. IF that is the way our system is set up, then why would these people need to go through bankruptcy?

Posted by: Stephanie at September 3, 2005 7:03 PM
Comment #77827


Sorry, i am speaking for debt entered into before Katrina while employed with a steady if meager income. The housing unemployment will take months to sort out and only after that can employment be addressed.. meanwhile many credit payments will be missed .. with accrued interest.

Posted by: jo at September 3, 2005 7:22 PM
Comment #77843


“meanwhile many credit payments will be missed .. with accrued interest.”

So the American government and the American people should put pressure on these companies to freeze that debt where it now, until such a time when these people are stabalized.

Problem solved. No bankruptcies needed.

Posted by: Stephanie at September 3, 2005 8:15 PM
Comment #77846

Stephanie, sounds very reasonable except for one small detail…

you began your solution with “So the American government and the American people should”

iow, problem exacerbated ;)

Posted by: jo at September 3, 2005 8:25 PM
Comment #77857


Well, since they’re passing a law anyway…

Oh, wait. That might be reasonable, now I’m getting your point.

Posted by: Stephanie at September 3, 2005 8:55 PM
Comment #78128


The earliest bankruptcy law was passed in 1800 by Congress. It’s a bit of a stretch to call this the work of the “Founding Fathers.”

Furthermore, it was tilted heavily in favor of lenders. People who owed money were not allowed to initiate their own bankruptcy proceedings. Only creditors could initiate the process, forcing debtors into bankruptcy to liquidate any holdings they had to pay down their debt.

Today, it is a supreme irony that corporate America has worked so hard to repeal the chance for people down on their luck to “wipe the slate clean,” especially since CEOs don’t think twice about seeking court protection from creditors when economic conditions and/or their own mismanagement puts their company on the rocks.

Posted by: Tom Edwards at September 5, 2005 10:47 AM
Comment #78134

Anyone noticed a certain absence of converstion of a certain topic on the Red Blog?
I just posted this to them:

How come no one on this blog has talked about Katrina, what can be done NOW, what you expect to see done to help these people, etc. Seems to me that this Blog has been missing the boat for over a week now.

Linda, your plastering this same message all over this web site appears to be an attempt to bait others into flame fests. To put a stop to it, your comment privileges here are removed. —Watchblog Managing Editor

Posted by: Linda Haenchen at September 5, 2005 10:56 AM
Comment #78367

Wow…too much misinformation here to address. I’ll keep it simple. The right to a “fresh start,” to file bankrupcty is a constitutional right (with certain checks of course). It was contemplated by the founding fathers as a response to debtor’s prisons (Yes, I have a law degree). Next, anyone who believes that the Bankruptcy “Reform” law was written by, shopped by and passed for the benefit of anyone other than the credit card industry is misinformed and deluded.

Posted by: Kim at September 6, 2005 9:19 AM
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