Congress’ Bankruptcy Bill A Disaster
Wednesday, March 12, 2003
Bill To Be Considered By House Judiciary Would Benefit Corporations, Harm Consumers
WASHINGTON, DC – The House Judiciary Committee today begins consideration of a controversial bill to change the bankruptcy system. Adam Goldberg, a policy analyst with Consumers Union, the non-profit publisher of Consumer Reports, made the following statement regarding the bill.
“At a time when the economy is slumping and many working families are struggling to keep up, the so-called ‘bankruptcy reform’ legislation now before Congress would harm ordinary Americans who have fallen on hard times through no fault of their own.
“Ninety percent of personal bankruptcies are caused by the loss of a job, high medical bills or divorce. The bill does nothing to help people who lose their health insurance when a medical crisis hits. It does nothing for the millions of people who are out of work and fighting just to keep a roof over their head. It does nothing to stop credit card companies from luring college students and others into traps where the easy availability of a plastic card lead to serious debt, ruining credit ratings for years to come.
“On the other hand, the bill remarkably legitimizes strong-arm tactics employed by credit unions against their members who have filed for bankruptcy. It protects the interests of predatory lenders – those that charge exorbitant rates to people who otherwise can’t get credit – but not their victims who are forced into bankruptcy when they can’t keep up with unconscionably high payments. It does nothing to require that credit card companies disclose the true cost of the credit they provide to cardholders. It puts the profits of powerful commercial organizations ahead of the welfare of women and children who are owed support.
“It’s bad enough having to face bankruptcy when you’re unemployed, seriously ill, or going through a divorce. But if Congress changes the bankruptcy system and makes it harder for consumers to get back on their feet, that’s just rubbing salt in the wound.”
Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.