Banks Buy Congress:
Full House Passes HR 833,
Bill to Restrict Bankruptcy

The lesson to be learned from HR 833, a bill to horsewhip bankrupts, is that money talks. Lenders have invested tens of millions in a lobbying campaign to buy a bankruptcy bill. Our representatives consider that banks make a lot of campaign contributions. Bankrupt consumers send no money to Congress. So guess who is winning?

Congressman Donald Payne of Newark gets a "hero" button since he was the only Representative from N.J. to vote against the monstrosity. Senator Torricelli is a sponsor of the "moderate" Senate bill, which merely puts the bankrupts in the stocks.

Why is HR 833 so bad? The bill does nothing to stop the main cause of bankruptcy: lenders send out four billion pre-approved credit cards each year. The bill is hypocritical because it would force the middle class into payment plans which the average bankrupt has no chance of paying. Current law gives consumers incentives to choose a Chapter 13 payment plan. HR 833, by expanding the list of debts which must be paid 100%, makes these payment plans impossible. A study by Creighton University professors, available at abiworld.org/, shows that only 4% of bankrupts can pay 20% of their debts in a 5 year plan. So 96% of actual bankrupts are justly in Chapter 7.

The real agenda of lenders is to place so many obstacles in the way that consumers get no protection from the U.S. Bankruptcy Court. First, everyone would have to make a useless trip to nonprofit credit counseling agency, who have no capacity to take on an additional million clients per year. If you can't get an appointment, too bad, no bankruptcy for you.