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[tvoivozhd <tvoivozd AT infionline.net>]

What is really needed is to outlaw unilateral contracts and send the 
officials of the
Bank Mafia to prison for extortion.


Boston.com      THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

The Boston Globe <http://www.boston.com/news/globe/>
WILLIAM J. MCLEOD


 Bring lenders, not borrowers, to heel

By William J. McLeod  |  February 5, 2005

CONGRESS WILL soon debate legislation that will limit bankruptcy options 
for many Americans. If passed, people facing bankruptcy could find their 
financial situations worsen by no fault of their own.

Certain events typically lead someone to file bankruptcy: a job loss, 
divorce, or health issue. Each, in varying degrees, can adversely affect 
the income of a household. The Harvard Law and Medical Schools study 
released in the journal Health Affairs this week found that half of all 
bankruptcies are caused by medical-related bills and most of the 
affected are middle class and insured.

Washington does not spend a lot of time talking about these cases.

Instead, expect to hear about people who rack up mountains of credit 
card debt that they have no chance of ever paying in their lifetimes. 
You will hear of trips abroad, expensive TVs, and houses full of unpaid 
furniture. What you will not hear are the true stories of the too many 
people who use their credit cards for food, prescriptions, medical 
expenses, and their kids' clothes.

Ultimately, the bankruptcy reform legislation would push debt-burdened 
individuals into payment plans -- for up to five years. A lot can happen 
in five years, like a divorce, a health problem, or job loss. Congress 
will also likely consider limiting the homestead exemption -- the amount 
of equity that a homeowner can shield from creditors -- which will 
render the recently increased Massachusetts homestead exemption of 
$500,000 meaningless.

What's missing in this new legislation? Any change to the current 
practice of lending money to just about anyone. These days, there is 
little difference between some credit card companies and a loan shark. 
Of course, credit card companies do not break legs, they just increase 
the percentage rate if a payment is late, add a late fee, add an 
overlimit fee, and some even charge an annual fee for the privilege of 
getting more fees. There are many people trying to get out of debt, but 
they are being thwarted by the perfectly legal fees and interest being 
levied against them.

The credit card industry is spending millions trying to convince 
Congress that the average American in debt is an irresponsible buffoon 
with an entitlement complex. Debtors cannot afford lobbyists. Before we 
let Congress shut the bankruptcy court doors on thousands of Americans, 
consider where you would be if your household lost a wage earner and 
then call your member of Congress.

The problem is not with the bankruptcy process. Our leaders need to know 
that it does not take much for an unexpected and uncontrolled event to 
lead someone to the doors of the bankruptcy court.

Perhaps more important, our leaders need to spend more time asking 
themselves what makes these financial difficulties so possible and so 
probable. Hopefully, honest answers will lead to more meaningful reform 
for people struggling with debt.

William J. McLeod is a bankruptcy attorney in Boston and a member of the 
National Association of Consumer Bankruptcy Attorneys. 

© Copyright <http://www.boston.com/help/bostoncom_info/copyright> 2005 
The New York Times Company