A chance to kill the Bankruptcy bill??? E-mail your Senators!!

I'm seeing signs of potential cracks in the coalition of politicians who've lined up to screw debt-laden consumers at the behest of greedy credit card companies. Please take the time e-mail and/or call your Senators (links at bottom).

These are two signs I saw that all might not yet be lost:

http://www.washingtonpost.com/wp-dyn/articles/A64232-2005Mar1.html
This WP article says a Republican Senator (Cornyn of Texas) threw a potential monkey-wrench in the bill by proposing an amendment that would cause Biden and Tom Carper, Delaware's other Senator, to vote against the bill. (Those of you in Texas might want to call Cornyn and express your support.) According to this article, congressional aides said yesterday that debate on the bill could last through Friday and, possibly, into next week.

Second, the New Republic published a very strong piece by their Editors, urging the Democrats not to lay down and play dead (they urged a filibuster if necessary):

Snip:
"We are beginning to wonder if the debate over Social Security privatization is a mere GOP diversionary tactic: Get Democrats to commit all their resources to a knockdown drag-out over retirement benefits, then quickly ram through a host of items off the business lobby's wish list. Exhibit A is the Bankruptcy Abuse Prevention and Consumer Protection Act--the latest name for a bill that Congress has been rejecting since the late '90s--which the Judiciary Committee approved last week and looks set for passage in the coming weeks.

......Credit card companies insist that most filers are merely credit addicts who have spent beyond their means and want to stiff the industry with the bill. (Given the credit card industry's marketing strategies--including documented campaigns targeting minors--this complaint is akin to drug dealers whining about their buyers entering rehab.) But a recent Harvard study shows that roughly half of all filers for Chapter 7 do so in the wake of major medical expenses.......... According to Harvard Law School bankruptcy expert Elizabeth Warren, since 1997, "Bankruptcy filings have increased 17 percent, while credit card profits have increased 163 percent."

......Which is why it's frustrating to see so many Democrats willing to accept its passage. To be sure, there are a few, such as Chuck Schumer and Ted Kennedy, who have promised to fight the bill on the Senate floor. But three Democrats--Joe Biden, Dianne Feinstein, and Herb Kohl--helped vote the bill out of committee last week..... a pro forma engagement, with Democrats conceding the battle in order to save their strength for later fights.

This is the wrong strategy. If anything, Democrats should oppose--even filibuster--the bankruptcy bill. Since November, Democrats have been casting about for new ideas to reinvigorate their party, with a growing number agreeing that support for working Americans should be a central tenet in the party's strategy. Meanwhile, Republicans have taken the election as a carte blanche to help their friends in big business, largely at the expense of working Americans. Rather than a fight not worth having, the bankruptcy bill is just the sort of fight the Democrats should relish.

Whole TR article (but you have to register at the site to view it)
http://tnr.com/doc.mhtml%3Fi%3D20050307%26s%3Deditorial030705

List of Senators' email's and phone numbers:
http://www.senate.gov/general/contact_information/senators_cfm.cfm

In addition to your own two Senators, it might be worthwhile to call Joe Biden and tell Joey-boy he ain't gonna get the Democratic nomination for President if he votes for this thing.

Calls and e-mails to Chuck Schumer and Ted Kennedy to urge them on may also help, especially since it looks like the Republicans may not have the 60 votes necessary to end a filibuster.

What a travesty if this thing passes....

this bill is bogus. A Harvard study showed on 3% of bankruptcies are credit card abuse. Most are medically related.

This bill allows a loophole for millionaires to keep their mansions but allows landlords to throw tenants out even if they never fell behind or have made up back payments.

Also, it does nothing to curb the predatory practices that credit card companies employ that actually keep the hardest hit people in debt longer while charging exorbitant interest rates.

Thanks for the links.

for the credit card companies yesterday. He was outraged that anyone would think campaign donations from the credit card companies would be influencing the debate on this issue. He really did "protest too much."

Oh no, they give campaign money because they support the candidate, not some quid pro quo. You don't believe me?

Pay to play, what a scam. The normal resident is always screwed over by these lobbiests. This bill really screws over you and me.

Now credit card companies can market to high school students and saddle them with debt before they even start college knowing they will be forced to pay. Even if the cc companies knowingly marketed to a high risk group that really doesn't understand the credit card scam.

I told him my personal story and the story of a number of other unemployed - or sometimes employed IT workers who have lost everything and have had to declare bankruptcy. Haven't heard back. They want people to be able to adjust to outsourcing (and the large banks are some of the biggest outsourcers of IT and Customer Service) - yet they want to take away our chance of a "fresh start" when our careers are lost to Indians and we have to start completely over in an entry level, low-paying job.

Situations like yours have gotten lost in all this. What are people supposed to do if they lose their jobs and have a lot of credit card bills?

You pointed out yet another glaring travesty -- the banks that are pushing the bankruptcy bill are among those who have outsourced the most jobs!!

What a colossal cruel joke our country is becoming.........

This bill targets the hardest hit while exempting the rich.

The arbitrary means test supposes that the applicant is pursuing bankruptcy for overspending and prevents the judge from determining blamelessness for extraordinary hardship of lost jobs or high medical bills.

Women-headed households with children will be the hardest hit.

Abortion clinic bombers are offered a safe haven and may claim bankruptcy to avoid paying restitution for their crimes.

Judges are prevented from considering the blamelessness of the applicant when determining if they may discharge their debt, all are assumed to be overspenders when over 50% are filing from medical necessity.

A Harvard study showed only 3% of filers are those who abuse the system and there are already provisions in place to deal with them.

The credit card companies and banks, who are the largest lobbying group in DC and give heavily to republicans, wrote this bill to their own advantage.

It does not curb abuses by companies like Enron and Worldcom or the predatory practices of the credit card companies.

"...credit card companies must share the blame for increased bankruptcies because they aggressively market products and inadequately disclose how interest rates and penalty fees mount up. For example, eliminating a $1,000 credit card balance paid off at a rate of 2 percent a month and carrying an interest rate of 17 percent would take 88 months, or more than seven years."

http://www.washingtonpost.com/wp-dyn/articles/A15399-2005Feb10.html

I found an easier way to contact Senators -- it was posted on Daily Kos.

With this, it only takes a minute to e-mail your two Senators (some group already has a letter format set up -- only you type in your address, off it goes to your Senators).

http://ga3.org/campaign/senateindebt

get more points regarding the bill. As you know, its an awful and probably needs to be filibustered:

Dear Senator Kennedy,

I apologize for being a non-constituent taking up your time but I wanted to be heard on the bankruptcy bill. I am concerned that my two republican senators maybe unresponsive and its my understanding that you have taken the lead opposing what is in my view awful legislation.

I work as a bankruptcy practitioner and below is a letter I sent my senators setting forth some of my substantive concerns about the bill. I am attaching it for any use you feel fit. The bill is bad enough, and its effects will be so sweeping, immediate, and dire for the middle class, that I believe this bill may merit a filibuster and I do not think I am overstating the matter. Please consider using this device to challenge the bill or at least to put some sunlight on it (the media has done almost nothing as to its negative consequences). Thank you for your consideration of this matter. The letter with the substantive points is as follows:

Dear Senator McCain,

I am one of your constituents and have practiced bankruptcy law for the past 12 years here in Phoenix. Before you vote to pass the bankruptcy bill could you please do two things: 1)Read this bill, and 2) Speak to at least one of Arizona's bankruptcy judges (preferably a republican one so that they have more credibility in your eyes) about the bill's merits. If you can still vote for the bill after you have read it and spoken to one of our judges then you have at least done the bare mininum diligence that this decision requires. I suspect though if you actually read the bill and speak to one of our judges about it (not necessarily in that order) you will be unable to vote for it because it is in effect an economic attack on the middle class and will render the bankruptcy courts dysfunctional. I know that may sound like hyperbole but I honestly do not think I am overstating the matter.

In my practice approximately 5% of the bankruptcy cases I see could be characterized as abusive or involving lack of personal responsibility. The balance are caused by the following in descending order: divorce, illness, injury, job layoffs, and entrepreneurial failure. Even Republican Senators during this debate have already described the bill as being "harsh" when applying it to members of the military. Just as the Senate does not think this harsh bill should apply to the military why would they want it to apply to the divorced, ill, injured, layed off and the entrepreneurs who fuel our economy, take the risks that have to be taken for growth to ever occur, and failed in this noble attempt.

I will preview two important provisions in the Bil. The Bill "means tests" the ability of people to file Chapter 7 liquidations and forces everyone except the lower middle class with one income (2 incomes will be too much), the impoverished, and the extremely wealthy to file a Chapter 13 wage earner plan bankruptcy instead of a Chapter 7 liquidation. The Bill also requires that debtor's lawyers assume liability for the accuracy of the Debtors' representations of their financial condition set forth in their bankruptcy schedules and statement of financial affairs. Chapter 13's administrative transaction costs are three to four times greater than Chapter 7's. Chapter 13's will require a monthly payment stream for 3 to 5 years whether or not there really is any disposable income from which this payment can be made. Chapter 13's do not provide a debt discharge until the conclusion of the 3 to 5 years and credit markets refuse access to these debtors prior to receipt of the discharge. In Chapter 7's the discharge order comes in approximately 4 to 5 months and credit markets (ie. car lenders) will deal with debtors (albeit at a higher rate) after the receipt of the discharge. Chapter 13's plan currently have a high failure rate (ie. most debtors default on their Chapter 13 plan payments and never get their discharge). No lawyers will represent Debtors with the new liability provisions. Without lawyers the already high Chapter 13 failure rate will skyrocket. The net effect is hundreds of thousands/millions of American middle class people (the divorced, ill, injured, layed off, and failed entrepreneurs) will no longer get discharges and no longer be able to function as productive members of the American economy. All this at time when we are likely looking at a coming housing bubble correction, interest rate spike (accelarated by government budget and trade deficts), and dollar sell off.

And for what? I understand that MBNA and other credit card issuers have contributed a great deal to Senators for the additional leverage on Debtors that this bill will give them but is that enough to vote for a bill that is harmful to the interests of the American economy and its middle class.

There are other bad things in the bill and if your office would to discuss them further feel free to correspond to arrange the same. Thank you for your time considering this matter.

Stories like yours are getting me madder and madder -- first the corporations outsource jobs and then the banks swoop in and use their political clout to squeeze every last cent out of those whose jobs have been pulled right out from under them!! This country is going to hell

I truly hope things work out okay for you......

I actually feel like a failure - too much Catholicism to not feel guilty about this mess I'm in. Thanks for the support!

I originally used the form from americanprogressaction.org, but I got an automated e-mail from Bayh's office that he only reads stuff submitted from his form online at this web-site.

First - even if a person can pass the means test on this new bill - the most frightening thing about this bill - is it puts a lot of risk on the attorney. If this bill passes an attorney can be liable if I misrepresent the facts in my bankruptcy. This is a risk a lawyer never assumes in any other situation. This will in effect drive bankruptcy attorneys to practice other types of law or increase their fees to cover the risk. This will be yet another burden to bankruptcy - being able to find and afford a lawyer.

Basically I told Bayh how as a contract mainframe computer programmer, my life was pretty fantastic in the 1990's and how I have lost everything. The sad fact is the "domestic contractors" seem to be the fourth choice for employers in IT. First choice is outsourcing - then foreign nationals working here with a temporary work permit - then domestic permanent employees and domestic contractors. The reason Foreign nationals are so desirable is because they are in essence held hostage by their work permits. Most foreign nationals I knew wanted more than anything to move here and were working on their green cards. If they got fired - they lost the work permit that is usually tied to their job. Many were afraid that they only had 24 hours to leave the country if they lost their job. Impossible when you have a wife here, a young child, etc. To stay they had to find someone else in the U.S. to hire them and pay for their work permit. Then they had to start the green card process over from the beginning, because most of them were getting a green card through their employer. They would do ANYTHING to keep their jobs. Work 36 hours straight. Work over 70 hours a week year after year. Work for very low wages. It is difficult for an American to compete with someone who is that desperate for a job. I can remember one Indian I worked with who would always get mad and say "You can't treat me like that - I have a GREEN card!"


I should have gotten out of IT years ago - but I was too in debt. But I am even more in debt now from being sporadically employed and living in hotels. My car is 9 years old. My clothes are threadbare. I wear $20 shoes. I am not living the high life. In the nineties I had a life with some luxuries - and not too much debt - although looking back I shouldn't have had ANY!! Most of my debt is from scrambling to find the next contract. Prolonging the inevitable by moving constantly to stay employed - which only devoured the equity from the sale of my home and increased my debt. I also tried to start my own business using credit cards as financing and that failed.


It used to be contracts lasted forever and I would get bored after a year+ and move on - that is why I am a contractor. However - I could always find a new contract in a day or two within 10 miles of my house. Now I look for jobs anywhere in the country and go months between short contracts. The recruiters always say that even though the contract is long term - "They have a policy to only commit to 3 months." That means either living in a hotel - or going out on a limb and signing a lease in a strange city for 6 months.

I know a guy who was promised that a 3 month contract was certain to go two years. He moved his wife, children and household to Indiana - only to find the project "outsourced" and he had to turn around and move everything to Phoenix and pay $2000 to his landlord to get out of his lease. Another colleague was debating about moving his stuff from storage in Boston and getting an apartment in Indiana because a contract he had on a project promised to go several years. He just found out they will all be let go sometime in the next 1-3 months due to "budget issues." He has been there about 3 months so far. You can say - get a permanent IT job and stop doing contract work - but permanent IT jobs are also going away. When you move constantly for short term assignments - to stay as employed as possible - it is VERY easy to go heavily into debt quickly. It seems like we make so much at $40/hour - but most contracting firms no longer subsidize - or even offer health insurance - we don't get sick pay or vacation or retirement - and we are out of work so much - I have found staying put and making $10/hour at a permanent job is more profitable than chasing $40/hour contracts all over the country. But - there is no way I can pay my credit card bills on $10//Hour. Although that doesn't even matter because I can't find a $10/hour job.

I think when you have a job - it is very difficult to imagine how quickly it could all disappear and you are left with nothing. A career that used to pay well - but now can be done much more cheaply in a third world country - and suddenly everything is gone with the wind. If along with nothing - you are stuck forever with debts carrying a 29% interest rate and late fees because you can't make the minimum payments, I think a lot more people will commit suicide. Right now my only hope is being able to declare bankruptcy and learn a new skill and start over in an entry-level position. If I didn't have that to look forward to - I don't know what I'd do. Bankruptcy is a humiliating way to admit to the world you have failed miserably. In my hometown they still publish bankruptcies in the paper - along with your assets and debts. I don't think many people would do it on purpose.

"Bankrupt families lost more than just assets. One out of five went without food. A third had their utilities shut off, and nearly two-thirds skipped needed doctor or dentist visits. These families struggled to stay out of bankruptcy. They arrived at the bankruptcy courthouse exhausted and emotionally spent, brought low by a health care system that could offer physical cures but that left them financially devastated.

"Many in Congress have a response to the problem of the growing number of medical bankruptcies: make it harder for families to file bankruptcy regardless of the reason for their financial troubles. Bankruptcy legislation -- widely known as the credit industry wish list -- has been introduced yet again to increase costs and decrease protection for every family that turns to the bankruptcy system for help. With the dramatic rise in medical bankruptcies now documented, this tired approach would be no different than a congressional demand to close hospitals in response to a flu epidemic. Making bankruptcy harder puts the fallout from a broken health care system back on families, leaving them with no escape."

http://www.washingtonpost.com/wp-dyn/articles/A9447-2005Feb8.html

Thanks for posting that link -- I was trying to find the Harvard study the New Republic article was talking about.

I was amazed when I read that 50% of bankruptcies were the result of medical bills. I hope the Democrats are smart enough to make this a huge facet of their argument against the bankruptcy bill. If people think this is all just about people who misuse credit, no one will pay attention. If they realize bankruptcies are due as much to medical problems (and/or the sudden loss of a job), it'll get more people on the Democrats' side.

We just filed last week -- ahead of this possible new legislation, thank goodness. And, before anyone asks, we do have insurance. We also have two family members with chronic conditions, one with a birth defect and two others who've just have a run of bad medical luck.

I want to explain, for those that don't know, how medical bills and credit cards are connected. Let's say that a family member was in the hospital for four or five days. Within a month, a bill will come in the mail from the hospital. It will show what insurance is anticipated to pay and what the patient is responsible for. The family adds this into their budget (if possible) and writes a check for partial payment to the hospital.

Now the hospital phones and says that it will need to forward the account to another company -- no, not a collection agency -- that can arrange a payment plan. This agency isn't a collection agency and nothing is added to your credit report at this point. Although the agency is somehow affiliated with the hospital, they are not the same entity. Whatever the amount of the bill, this agency doesn't want to set more than a 6-12 month repayment plan. When the family says they can only afford $50 per month at this time, that's when things get interesting.

The agency has pulled a copy of the family's credit. The agency can see there is X amount available through credit cards. Now comes the threat... we cannot set up a payment plan for more than a 12-month time frame. I see where you have X amount of dollars available on Such-and-Such credit card. You could pay us with that card and then make monthly payments to the credit card company. You either need to do that or set up a larger monthly payment with me today or I'll be forced to turn your account over to a collection agency.

That's how it works... or at least, that's how it worked in my experience. BTW, the person who has a 4-5 day hospital stay not only will be confronted with a hospital bill. There will also be radiation costs, personal doctor fees, anesthesia, possibly home health care or therapy. On our insurance, each individual area has its own deductible that must be met -- some have two! (For instance, outpatient surgery is different from traditional surgery.)

It's a freaking nightmare and I'll be so happy when our bankruptcy is complete. On the other hand, I'm scared to death as well. While we will be given a fresh start, many of the circumstances which brought us to this place still exist.

And of course the credit card company checks your credit report and sees that you have an outstanding debt to the hospital so they raise your interest rates through the roof. I'm so sorry this happened to you.

Any congressman or senator who votes for this travesty is no friend to hard-working Americans like yourself.

Good luck. I hope everything works out for you. Hang in there. :hug:

I'm so sorry for all you've had to go through. Bad enough that you have to somehow get through the medical problems, but to be subject to people snooping around your credit records and finding ways for you to pay them through credit cards is horrible. I hope things work out okay for you and your family.

I feel for you. I think this bankruptcy reform bill "should" bring to light how many serious issues Congress should be dealing with - like health care reform!!!