bankruptcy & credit cards
dhenwood at panix.com
Fri Jun 12 08:56:08 PDT 1998
Speaking of credit cards, I interviewed Ken Klee, a UCLA law prof, on my
radio show last night. Klee was once the chief staffer of the House
Judiciary Committee, where he was the principal author of the 1978 U.S.
bankruptcy code. Two days ago, the House voted to tighten things up sharply
- to force all households with incomes above the national median into debt
repayment plans (today that's only an option for those who want to take it)
and to make credit card debt nondischargeable in bankruptcy. Enforcing
repayment plans would, as Klee put it, turn the Bankruptcy Court into a
publicly funded collection agency; judges would become the supervisors of
household budgets for the busted. And making credit card debts
undischargeable, the industry could have it both ways - continuing to hand
out credit cards like mad (3 billion solicitations were mailed in the U.S.
last year), while getting intensified legal enforcement for those who get
in over their heads. Klee said that one credit industry lobbyist said that
if they got half of what's in the bill, they'd feel like they'd gone to
heaven; there's a good chance they'll get all of it. The Senate will take
up the bill late this summer, and the administration has made minor
objections but Clinton would probably sign it.
Why is the bill so industry-friendly? Well, they've given out some $40
million in campaign contributions in this cycle, and the bill the House
passed was written by Morrison & Forrester, a San Francisco law firm that
represents the credit industry.
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