The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

Tightening Bankruptcy Laws—But Only for Working People

Mar 21, 2005

The U.S. Senate just passed a bill to change bankruptcy rules. The bill still has to pass the House, but that’s almost certain. In any case, it’s a real attack on working people.

It’s not surprising that the politicians waited until after the election to pass this bill. It’s so obvious an attack on the population that they worried they might not get elected. And that was true of the Democrats as well as of the Republicans, since 18 Democrats, including Senate Minority Leader Harry Reid, joined the Republicans in voting for it.

Supporters of this bill pretend that people who file for bankruptcy are just irresponsible spendthrifts who ran up too many debts. In reality, more than half the people who file for bankruptcy do so because they got sick and couldn’t pay their medical bills. Or they lost their jobs and were out of work for too long to be able to climb out of debt.

What makes it worse is that once people reach a point that they can’t pay, the credit card companies charge exorbitant interest rates and extra fees for exceeding credit limits. This system makes it so that people simply cannot climb out of debt.

Did the senators do anything to stop credit card companies from making it easy to get credit cards, or limit the interest rates they can charge? On the contrary, the Senate rejected an amendment to the bill that would have capped interest rates–at 30%!

Passage of the bill would mean credit card companies and banks could require bankruptcy filers making over a certain limit to set up repayment plans. The politicians want to say that the bill excludes lower income people, but for families with two incomes, it’s not hard to be above the limit.

The most disgusting aspect of the bill is that it does not touch wealthy people who shelter their assets in trusts. It also does nothing about stopping big corporations, like Enron, WorldCom or Kmart from dumping pension plans and medical benefits through bankruptcy.

The politicians can say all they want about making people "financially responsible." This bill shows who they are being financially responsible to–the wealthy class they serve!