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Author: ChicagoBob Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308519  
Subject: Re: Bankruptcy- unfoolish way out Date: 5/12/1998 11:45 AM
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Arrrrgh!

I totally agree that it should be harder to get credit. But, recently, this has been driving me **nuts**. It should NOT be harder to declare Bankruptcy.

This is another attack by some very rich and powerful aspects of our society (CC Companies and various segments who think we should get tough on deadbeats) on those least able to protect them selves or participate in the political process. Declaring bankruptcy has enough negative consequences just by itself that we do not need to make it harder. Bankruptcy is supposed to allow people who have been crapped on by life or screwed up a chance to start over with a clean slate.

I very good friend of mine is a bankruptcy attorney and he says that most people who declare bankruptcy have bad credit card debt problems. But, it is almost always not the bad CC Debt that caused them to have to file bankruptcy.

Far and away, the top reasons are death, divorce, disability, lawsuit judgments, and medical expenses. He observes that less than about 5% of his practice is what he could consider "abusive bankruptcies," meaning those people who have run up very high CC Debt just to discharge them in bankruptcy.

If the CC Companies want to extend excessive credit to victims unable to sustain the debt load, then the CC Companies needs to account for the risk that their victims might file bankruptcy. If it is not a risk that the CC Company is willing to accept, then the credit should not be extended in the first place.

-ChicagoBob

PS: Write your local Congressman that you do not support the Credit Card Company Profitability Act (what I call the new bankruptcy provisions that make it harder to discharge unsecured CC Debt).
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