The New Bankruptcy Bill / Who Does It Really Benefit?

Most of us have heard on how congress is in its final phase of passing a new bill revamping the bankruptcy laws. We are told that the finance companies particularly the credit card companies are pushing for these legislation changes. They claim that if one cannot totally dispose of their debts that they will be less inclined to excessive borrowing. Also these easy credit purveyors claim that they will lower the cost of borrowing to all consumers if they do not have to take a full loss on bad debts.

Does anyone really believe that these restructured laws will benefit anyone but the credit card purveyors and their attorneys? I highly doubt they will lower the rate on consumer debt. The law will require some restitution during bankruptcy but this is a relatively small ratio of the balance owned to the financial industry. And I doubt the tactics used to market these easy credit instruments will be changed. The real problem with easy credit is that it allows many of us the opportunity to hope our present situation will change before we get into to much of a whole. Those who abuse the system will always find new angles in which to rip off the system. The real looser will be the average individuals and families that find themselves in a failing business or loss of jobs or income. These consumers use credit cards to survive thru tumultuous periods with the hope that things will improve. They have no interest in using this credit, accept to pass from point to point. The purchases they make for holidays or special occasions usually are done based on knowledge that they can pay off their purchases over a reasonable period of time. The downside is that the credit card companies look for every excuse to raise rates on these consumers knowing full well that they will entrap their customers into owing them endlessly.


I doubt this new law will benefit the economy. As more consumers find that the banks have additional power over their finances many will end up slaves to these institutions. Also the attorneys for the banks will be more vigorous into forcing the banks hand on consumers. All these powers will weaken the power of consumers and actually reduce the demand for goods and services. Consumer debt has help balloon the U.S. economy. If the interest rates on consumer debt do not fall which I’m sure it won’t, the banks will just be involved in enriching themselves at the expense of the economy and consuming public.


With this knowledge you again must ask, who really benefits from this new legislation?