Topic: "Chapter 13"
A generation ago, The Federal Tax Lien Act of 1966 came into being. It established the priorities for creditors. It established for all judicial proceedings the "first in time, first in right" by which nearly all creditors would be paid. It should not surprise anyone that "attorneys" (who might have had something to do with writing the law) were specifically identified as a "priority." Unpaid taxes, supported by a legal notice (lien), became a "super priority." Pretty far down on the list were retail purchases on credit. Oftentimes, these creditors would find their "account receivable" was to become "uncollectible."
Prudent business, it would seem, would be for a restriction on credit to persons considered risky. At the same time, it would seem logical that businesses selling consumer items on credit would lobby to increase their standing against other priorities. American History tells us that neither of these occurred.
The expansion of consumer spending increased the availability of credit, and at rates far beyond the norm. Rather than fight to improve their priority, the consumer sales world fought to increase the costs of borrowing. Even today, 30% rates on credit card balances are not unusual. The justification for such "usury" is because of the "high costs" associated with collection of ever-increasing balances due.
Business marches on, and one way to improve profitability is to restrict the ability of the borrower to seek legal protection. Logically, if a consumer is prevented from filing for bankruptcy, then he is able to accumulate more debt, and there is nothing to prevent the lender from charging even higher rates, and becoming increasingly aggressive.
Chapter XIII of the Federal Bankruptcy Act is known as "The Wage Earner Plan." It arose because of the instances primarily in the South where working people found themselves heavily in debt on consumer purchases. Particularly in the areas around Memphis, Tennessee, people with regular jobs were being mercilessly pounded by creditors, and the struggle to rise from poverty was greeted by job loss from employers frustrated by garnishments and seizure of wages. Chapter XIII allowed people such as these to follow a court-directed spending plan to keep their jobs while satisfying the "past due" obligations.
Guess who was pissed? You got it, our friends who extended all that credit in the first place. They weren't being paid as fast, and the court actually had the gall to keep these people from getting further into debt.
It took the bastards an entire generation. Our "Compassionate Conservative," and his Merry Band of Legislators have made it much more difficult for borrowers to enter Chapter XIII. In the States of Tennessee, and Georgia, and South Carolina, where levels of fiscal sophistication are not at their peak, the onus falls on those poor dumb people who borrow on credit cards, and borrow on credit cards, and borrow on credit cards.
Sure, it will mean that the number of bankruptcies will decrease, but not because people acted more responsibly. It is just one more way that the weakest and the smallest are kept "where they belong."
Damn George Bush, and everyone of the miserable bastards who voted for this disgusting bill. It is my great regret that a certain carpenter from Nazareth is not around to toss every one of you from the Temple.