requires people to get credit counseling before they can file for bankruptcy protection. The premise behind this provision is that by forcing people to get counseling, it will show that many bankruptcy filers in fact have enough money left over after taking care of their essential expenses to repay creditors.
I always viewed this premise with skepticism. Filing for bankruptcy is unpleasant and trying, and I don’t think anyone would just do it because they wanted an easy way to avoid paying bills. Dennis Hastert had a different opinion:
“We must stop abuse. Those who abuse the system make getting credit more expensive for everyone. Bankruptcy is for those who need help, not those who want to shift costs to other hard-working Americans,”
So there you have it. Two different opinions. Only now, because of the new law, which requires mandatory counseling as part of filing for bankruptcy, we can examine some actual evidence and see who was correct. Here we go:
Now, in the first analysis of the tens of thousands of people who have undergone credit counseling since the law passed, the bankruptcy attorneys association found that nearly all (97 percent) of the debtors truly couldn’t pay their debts.
. . .
Four out of five filers felt forced to seek bankruptcy protection because of a job loss, catastrophic medical expenses or the death of a spouse, according to the report, “Bankruptcy Reform’s Impact: Where Are All the Deadbeats?”
Those lazy widows! This news story reveals that the Republican talking points on this matter were total, total bulls–t. The report reveals that Americans seeking bankruptcy protection were, well, bankrupt. That was the whole point of bankruptcy law in the first place, so here the Republicans have introduced a pointless, unnecessary law that benefits the credit card companies and the credit counseling services at the expense of widows, people suffering medical problems, and people who have lost their jobs. Way to go, jerks!