rssDebt Creeps Into Democratic Campaign
Thursday, January 17, 2008 at 10:57 am
- 8 Comments
The bankruptcy experts over at creditslips.org, while careful to shy away from actually going down that road, nonetheless picked apart the comments on bankruptcy that came up during the recent Democratic presidential debate. Bankruptcy reform, passed in 2005, made it harder for consumers to wipe away certain debts. Robert Lawless, a law professor and bankruptcy expert at the University of Illinois College of Law, summed things up this way: “It is only Sen. Obama who can claim he did the right thing.”
More from Lawless:
Senator Clinton and former Senator Edwards expressed regret over their earlier support for the bankruptcy law (transcript here), and they should regret these positions. It always was apparent that the 2005 bankruptcy law would hurt the middle class, which Senator Clinton and former Senator Edwards profess to care about so much. Senator Clinton and former Senator Edwards hardly stood alone from their fellow Democrats. The 2005 bankruptcy law passed the Senate 74-25, with eighteen Democrats voting in favor (full roll call vote here). The story of the 2005 bankruptcy law is about industry campaign contributions overcoming the better instincts of our nation’s leaders. Senator Obama deserves some recognition for standing up to the consumer credit industry.
Whether that will give Obama any sort of edge is questionable. The 2005 bankruptcy law in hindsight is seen increasingly as lender-written legislation. All the rhetoric back then about irresponsible consumers and their credit card debts seems dated and irrelevant, with banks and mortgage companies taking big losses over investments in subprime mortgages. Consumer advocates now are trying to change the law to allow modifying mortgage loans for borrowers in bankruptcy.
The candidates didn’t address that effort during the debate, and it’s not a given it will come up again sometime soon. Bankruptcy still remains, in the minds of many, a technical issue that doesn’t lend itself easily to campaign slogans. Nonetheless, as Lawless notes, Obama deserves the credit – if you don’t mind the use of that term here – for standing up to the financial services industry when many colleagues didn’t.
8 Comments
Comment posted January 17, 2008 @ 12:30 pm
obama deserves a lot of credit for a lot of things
Comment posted January 17, 2008 @ 12:29 pm
Let’s say my cousin is a dope. I know the whole family has lent him money, and he never pays it back. So he asks me for a loan, and I give it to him, and then he (of course) fails miserably. Do I cry to momma? No, I face the fact that I’m an idiot — something lenders won’t ever do.
Comment posted January 17, 2008 @ 12:09 pm
The bankruptcy bill was TOTALLY lender-written legislation. The same people who sent credit card applications to children and dogs were crying about people who couldn’t pay the bills. They created the mess and then asked Congress to clean it up. The sub-prime situation is "deja vu all over again.
Comment posted January 17, 2008 @ 6:09 am
The bankruptcy bill was TOTALLY lender-written legislation. The same people who sent credit card applications to children and dogs were crying about people who couldn't pay the bills. They created the mess and then asked Congress to clean it up. The sub-prime situation is "deja vu all over again.
Comment posted January 17, 2008 @ 6:29 am
Let's say my cousin is a dope. I know the whole family has lent him money, and he never pays it back. So he asks me for a loan, and I give it to him, and then he (of course) fails miserably. Do I cry to momma? No, I face the fact that I'm an idiot — something lenders won't ever do.
Comment posted January 17, 2008 @ 6:30 am
obama deserves a lot of credit for a lot of things
Comment posted October 13, 2008 @ 12:59 am
Let me ask you why does obama deserves a lot of credit for a lot of things? Just because he might be the next president of US. Can we offer the same thing to a common man in US. NO. But that argument is more difficult to make, takes more time and effort to do it and is complicated by the reality that Obama risks a backlash if he tries to make it by attacking the front-runner. The bankruptcy debt was completely lender-written legislation. As we all know any Individuals as well as businesses may file for bankruptcy. In certain incidents, a creditor (can be a person or business) who owes money through an involuntary procedure may force the filing of a bankruptcy proceeding. However, this is a very rare case. I m dead sure debt cures will the only option left for the people of United States in the long run.
Comment posted October 13, 2008 @ 7:59 am
Let me ask you why does obama deserves a lot of credit for a lot of things? Just because he might be the next president of US. Can we offer the same thing to a common man in US. NO. But that argument is more difficult to make, takes more time and effort to do it and is complicated by the reality that Obama risks a backlash if he tries to make it by attacking the front-runner. The bankruptcy debt was completely lender-written legislation. As we all know any Individuals as well as businesses may file for bankruptcy. In certain incidents, a creditor (can be a person or business) who owes money through an involuntary procedure may force the filing of a bankruptcy proceeding. However, this is a very rare case. I m dead sure debt cures will the only option left for the people of United States in the long run.
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