Bankruptcy Reform: Designed to Protect Big Business

Who will benefit from the new bankruptcy reform laws? The financial services industry and other big business groups, that's who.

These groups contributed millions of dollars to elect Bush and other Republican \rcandidates in 2000 and 2004, with the goal of overhauling the bankruptcy system. \rThey and other big business groups have continued to spend millions, rage \rarguments and lobby persistently for bankruptcy reform. In March 2005, with the \rHouse and Senate loaded top heavy with Republicans, they succeeded.

The financial services industry includes the banks, credit unions, the American Bank \rAssociation, credit card companies and retailers.

Big business groups pressuring for legislation include auto makers such as the Ford \rMotor Company, General Motors, and DaimlerChrysler. These groups were willing to \rpay millions of dollars and spend many years lobbying for bankruptcy reform. The \rcar makers, unhappy with the way auto loans are handled when an individual files \rfor bankruptcy, pushed for reform.

Others who lobbied heavily for reform were car dealers, record labels, and gaming \rinterests such as casinos, many of whom represent large corporations and prime \rlenders, such as MBNA Corporation and American Express Company, who \rcontributed millions not only to stack the political odds in favor of the bankruptcy \rreform bill, but to elect candidates sympathetic to their goals. MBNA Corp. and \rAmerican Express Co. are among the top beneficiaries of the bankruptcy reform.

Bankruptcy reform supporters argue that debtors seeking relief through bankruptcy \rare either purposely gaming the nation's bankruptcy system or they are \rirresponsible spenders who should pay at least a portion of their bills if they are \rable to. In fact, about half of the claims filed for bankruptcy are attributed to \rmedical costs.

Bankruptcy reform will require most filers to receive credit counseling and lessons \ron how to improve their financial management skills. Bankruptcy reform states that \rfilers pay for the counseling themselves.

Included in the new bill is a provision requiring that credit card billing statements \rinclude an example of the time it would take to pay off the balance at a particular \rrate of interest. Billing statements are also required to supply a toll free number for \rthe consumer to call and inquire about the length of time it would take to pay off \rthe balance if they are only making the minimum monthly payments.

Citizen advocate Suzanne Arthur highly recommends the Repair Bad Credit Newslog, \rfor news and further information on consumer debt and repairing credit scores. Go \rto: Bad Credit Repair Newslog