http://www.talkingpointsmemo.com/bankruptcy/April 14, 2005 -- 12:23 PM EDT)
Guest Blogger: John Edwards
This morning Elizabeth Warren and her students invited
me to say a few words about the bankruptcy reform
bill. I'm grateful for the opportunity.
I'm now spending a lot of my time tackling the
challenges of poverty, but I learned a lot
about bankruptcy on the campaign trail last year. I
saw how many good families end up broke and poor, and
how they need the safety net of a fair bankruptcy law
if they're going to get back on their feet.
Like a lot of Democrats, I voted for a bankruptcy
reform bill before. I can't say it more simply than
this: I was wrong.The bill is supposed to crack down on irresponsible
borrowers. That's the right thing to do.
The problem
is that this bill imposes big burdens on families who
did everything right but went broke just because they
lost a job or lost their health insurance. And, even
more than the legislation I supported, this bill
doesn't crack down on the real abusers.<>In some states, a multimillionaire CEO can drive his
company into the ground, declare bankruptcy, and still
keep his mansion-tennis court, Jacuzzi, and all. The
2001 bill at least stopped that by capping the
"homestead exemption" at $125,000. This bill will
allow many multimillionaires to protect their mansions
if they plan ahead.
We've also seen the credit card companies and
predatory lenders become more aggressive. Today, many
Americans have seen their interest rates triple to 29%
or higher-not because they missed a payment, but just
because they lost a job and needed another loan. Many
more Americans are losing their homes because lenders
have hidden points and fees in their loans. These
companies are making billions by kicking people when
they're down. This bill does nothing to stop them.
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