Nerve

Just read a NY Times story, "Downturn Drags More Consumers Into Bankruptcy" that closes with galling quote:

Ms. Warren, the Harvard law professor, said many borrowers had been left with the mistaken impression that they could no longer file. And, she argued, “the widespread perception that bankruptcy is not available to help families makes this economic crisis worse.”

That's Elizabeth Warren, complaining about a "widespread perception" that she is responsible for.

Because she was the face of the anti-bankruptcy reform crowd a few years ago, she's been the person the media has turned to for reliable one-sided analysis of bankruptcy ever since.

It was on her blog at Talking Points Memo where you could find cries that bankruptcy reform "prohibits ordinary ... families from restructuring and discharging their debts following medical emergencies and job losses." She argued that "lenders want the Federal government to intervene to force the debtor to pay, by passing a law prohibiting them from filing bankruptcy and discharging the debts."

In interview after interview, and in blog posts, she repeated the theme that the real thrust of bankruptcy reform would be to eliminate access to bankruptcy for middle and lower class families. Here is part of her summation of bankruptcy reform: 

• Make more hurdles and traps, with deadlines that a judge cannot waive even if someone has a heart attack or an ex-husband who won’t give up a copy of the tax returns, so that more people will get pushed out of bankruptcy with no discharge.

• Make it harder to repay debts in Chapter 13 by increasing the payments necessary to confirm in a repayment plan, so that more people will be pushed out of bankruptcy without ever getting a discharge of debt.

None of that has happened, by the way. The NY Times article I mention above is about how bankruptcy is on the rise. So BK reform did such a good job eliminating access to bankruptcy that more and more people are doing it. Despite Elizabeth Warren's best efforts to convince them that they'd be turned away at the courthouse door. 

And now she has the nerve to say that this misconception she created is making the crisis worse. She should be ashamed of herself.

Comments

[John]

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[steve]

The credit world in not a place for the faint of heart. Banruptcy is just one of the consequences. Collection agencies are used to recover debt and people can get pushed to the breaking point by debt collectors. There are ways to avoid collections and even if you get into a bind there are laws to protect the consumer. The FDCPA Fair Debt Collection Practices Act is one place to got to find out when a Collection Agency steps over the line.