If you're interested in the controversial bankruptcy legislation currently before Congress, check out the limited-duration bankruptcy blog at talkingpointsmemo.com. The legislation, repeatedly put forward at the behest of banks and credit card companies, would require that people who make more than the median income in their state file for Chapter 13 bankruptcy protection, under which debtors are required to repay at least some of their debt, instead of Chapter 7 bankruptcy, under which a person's debt is erased.
Titled "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," the bill may fulfill the first part of its name but seems decidedly short on the second; amendments exempting victims of identity theft and all military personnel from the "means test" and discouraging predatory lending practices have failed to pass. Supporters claim that the Consumer Protection part comes in when banks and credit card companies no longer pass on the cost of unpaid debt to non-bankrupt customers. Unlike the tort reform measure recently enacted that limited many class-actions suits to federal courts, however, the bankruptcy bill doesn't appear to be due to popular demand. I've heard many regular people complain about litigation that they consider inappropriate and unjustified, but I've never heard a person not employed in the financial industry bitch about the ease of personal bankruptcy. Corporate bankruptcy, yes; personal bankruptcy, no.
Pam Spaulding points to some statistics on who is declaring bankruptcy and what really is costing consumers money; Christian lawyers lobbying against the bill have been told that the Bible is not useful authority on financial matters (as opposed to same-sex marriage); the Mahablog notes, "Medical bills account for half of personal bankruptcies."