Elizabeth Warren: How Clinton Backed Student Loan, Mortgage Debt Slavery with Bankruptcy “Reform” “

Elizabeth Warren on How Clinton Backed Student Loan and Mortgage Debt Slavery with 2005 Bankruptcy “Reform” Vote

http://www.nakedcapitalism.com/2015/10/elizabeth-warren-on-how-clinton-backed-student-loan-and-mortgage-debt-slavery-with-2005-bankruptcy-reform-vote.html

A sorry chapter of Hillary Clinton’s legislative record was her vote in support of the 2005 bankruptcy “reform” bill. This bill had been keenly sought by the credit card industry, had come up repeatedly in Congress and had managed to be beaten back….until 2005, when it became law. One of its biggest proponents was the big credit card issuer MBNA, which is now part of Bank of America. MBNA has estimated that getting the bill passed would enable them to get an additional $10 a month from consumers who were eligible for bankruptcy, which would mean an additional $85 million a year to them in profits.

In addition to restricting access to Chapter 7 bankruptcies, which enabled borrowers to wipe out their debts, and forced more into Chapter 13 bankruptcies, which force borrowers to negotiate a 60 month repayment plan with budgets that require them to live at an extremely meager level (one indicator: the amounts allotted for food are stunningly low, and one wonders how people who are juggling multiple jobs can possibly find the time to shop for food bargains and cook so as to stay within these restrictions). Many people cannot complete their Chapter 13 plans due to ‘shit happens” (an unexpected expense, like a medical emergency or car problem, can lead to a borrower missing his repayment schedule). And that’s before you get to bad faith conduct by the lender intended to make the borrower fail or appear to fail, which we documented regularly during the foreclosure crisis (the objective was to enable the bank to proceed with a foreclosure).

As most readers know well, the provisions of the 2005 bankruptcy “reform” bill on student debt were even more draconian. The overwhelming majority of Student loan borrowers are barred from discharging these debts in bankruptcy. Moreover, Social Security payments can be garnished to repay student loans. putting parent/grandparent co-signers and middle aged students presumably seeking to qualify themselves for new careers at risk.*

As you can see in this Bill Moyers segment, Elizabeth Warren recounts how Hillary Clinton sought out Warren’s advice on the bankruptcy bill in 1999, and persuaded her husband to veto it, one of the last acts he took as an outgoing President. Warren points out that this bill at the time was not very high priority pro-business measure and by implication was not unduly costly for a departing Chief Executive to veto...

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