Proposed Law Changes (Do Not Delay)
Bankruptcy Laws Change!
Bankruptcy was too good a deal. People weren’t paying what they could afford and were abusing the bankruptcy system.
At least that is what credit card companies told Congress. The worse thing was that Congress listened.
Based upon surveys and our own experience nothing could be further from the truth, however these were the things the credit card companies convinced Congress of and for good reason.
There is a lot of money at stake. Credit cards have been an absolute “cash cow” for the lending industry. In just 2003, according to an article published in USA Today on 7/14/04, quoting R.K. Hammer Investment Bankruptcy, an organization that tracks the credit card industry, the credit card companies raked in $120 billion.
Do you know who was footing the bill? You were.
Over the course of the past seven years, powerful credit card companies and financial institutions successfully lobbied Congress to make changes to current bankruptcy laws. They were making billions of dollars a year, was it any wonder why the credit card companies were more than willing to spend a few million dollars paying for lobbyists? They were paying for lobbyists on one hand and making campaign contributions on the other. If it meant they had a chance to keep you and other good, hard working people from filing bankruptcy and under their control, it was worth it.
The bankruptcy bill before Congress was spun as reform but to all those in the know it was nothing more than “deform,” a bill clearly intended to shut down bankruptcy as the escape hatch for good, honest hard-working people crushed with debt.
Why, you asked? Easy. If you couldn’t file bankruptcy, the credit card companies would go right on squeezing you for more money. If you couldn’t file bankruptcy, they wouldn’t have to worry that abusing you by increasing your interest rates or the amount charged for late payments, which would drive you into the hands of a bankruptcy attorney.
As expected, there was so much money at stake that the credit card industry continued to push its passage.
As it turns out, the big credit card companies made a horrible mistake.
They didn’t get what they had paid for.
You know that new, big, bad bankruptcy law.
It turns out that it wasn’t that bad.