Consumer debt crunch and division by two

Charles Brown charlesb at
Wed Jun 10 12:33:43 PDT 1998

Regarding bankruptcy, I believe there is a period that must pass before a second bankruptcy can be filed. Bankruptcies are not an unlimited escape route from debt. What proportion of total national credit card debt and all debt is discharged in bankruptcy , Doug ?

I thought at some point on this thread someone mentioned a "credit crunch", and I think you said "what credit crunch ?" I don't quite understand how the borrowers don't end up crunched from paying more when they buy on credit; or if they "get out of it" by bankruptcy or otherwise, how the creditors aren't crunched. How can credit cards give consumers net more income ?

Charles Brown

>>> Justin Schwartz wrote:

Sure, you can be pretty sure of having your credit card debt discharged in bankruptcy. Sometimes that can be a sensible choice, which is why we have bankruptcy laws. But juggling your finances to cloak undischargeable debt under dischargeable debt is very seriously illegal. As I say, don't even think about it. Don't advise it, don't tell people how to do it, and for God's sake don't help anyone do it. There are laws it's morally necessary to break and prison time it's morally advisable to risk. This isn't a case of that.

- Doug Henwood had written:

> Justin Schwartz wrote:
> >I'd be very cautious about even appearing to advocate or counsel credit
> >fraud, bankruptcy fraud, etc. You could go to prison for a very long time
> >if you tried it and you could be nailed as a conspirator, liable for all
> >the crimes foreseeable in the conspiracy, for advocating it. Don't even
> >think about it.
> No one was counseling
> bankruptcy fraud. There is no objective measure of personal insolvency. If
> you file, you can be pretty sure of having your credit card debt
> discharged. It's a lot more sensible than sweating bullets to service your
> debts.
> When I did a piece on bankruptcy for The Nation about 5 years ago, I
> interviewed a guy who did the second-highest volume of personal bankruptcy
> filings of any lawyer in Manhattan after Jacoby & Myers. He said people
> came into his office crying, miserable, having suffered to service for
> months, even years. He said he gives them a little talk, that goes
> something like this: "They're taking advantage of you. They over-promote
> credit, tempt you into using it, then you get in trouble. They're making a
> ton of money anyway. Fuck 'em! File!" He said the relief once they
> understood this basic proposition was immediate & visible.
> To Michael's why not more bankruptcies, I gotta add, why not?

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