Rob goes for broke

Ok, I guess it's finally time to explain why I've been winging back and forth between NY and Guatemala lately.

It didn't have anything to do with bagel cravings, the abundance of pre-Halloween candy, or the autumn leaves exploding in color... it had to do with poverty.

Mine, to be precise.

Yesterday a new Bankruptcy Law went into effect in the United States. In short, it makes it very difficult to have your debt completely forgiven by the courts. The process now involves massive paperwork, higher lawyer's fees and court costs, mandatory credit counseling, and the likelihood that you will still be required to make payments toward your debt.

In other words... the Bush administration, with the help of Congress, just cut a huge hole in the safety net. And the banking, credit card, and retailing industries provided the scissors.

So I, like thousands of others, rushed to declare myself 100%, extremely, absolutely, and utterly broke.

The truth is that my $500 monthly salary wasn't cutting it... even here in Guatemala. Payments to my credit card barely covered the interest. I suddenly realized that having nothing would actually be a step up from the negative financial hole I was in. (You know that things are pretty bad when you yearn for zero.)

I filled out my paperwork in August and made my court appearance on October 6th. The pre-Republican bankruptcy process was fairly easy and mostly painless (well, except for the lawyer's fee.)

Now I'm debt-free and able to do wild and wacky things with my money like buy health insurance and open a savings account. Call me crazy.

I guess that's what most infuriates me about this new law. Declaring bankruptcy was the last hope for many like myself who found themselves behind the financial eight ball. If this new legislation had placed a cap on the interest rates that credit card companies charge, or took a step towards (and I know I'm entering into fantasy-land here) guaranteeing universal health care coverage, I'd be less likely to see it as just another way of screwing the poor.

But as Tamara Draut, Director of the Economic Opportunity Program at Demos affirms:

"This is a dark day for American families. New research shows that low- and-middle income households in the United States face explosive increases in living expenses such as housing, medical care and education, and have turned to high-cost credit cards to make ends meet. The new bankruptcy law will prevent these families—many of whom are the victims of a medical illness, job loss or divorce—from ever reaching financial stability.

This legislation was aggressively lobbied for by the credit card industry, whose abusive practices make it nearly impossible for families to climb out of debt. The credit card companies are the only winners here. Everybody else loses."

So to George Bush & Co. I'd just like to say: I'm not proud of having to admit in court that I was unable to pay my debts. But all things considered, I would rather be declared "financially bankrupt" than "morally bankrupt".

Tags: Bankruptcy, Law, Bush

Posted by elcanche at October 18, 2005 10:38 PM