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[Ray]

[This excerpt comes from an article in the New York Times on 3/8/05.
It says, for consumer bankruptcy generally, the things that some of us
have been saying about student loan discharges in bankruptcy.]


The Debt-Peonage Society
By PAUL KRUGMAN

Published: March 8, 2005

Today the Senate is expected to vote to limit debate on a bill that
toughens the existing bankruptcy law, probably ensuring the bill's
passage. ...

The bankruptcy bill was written by and for credit card companies, and
the industry's political muscle is the reason it seems unstoppable. ...

The bill would make it much harder for families in distress to write
off their debts and make a fresh start. Instead, many debtors would
find themselves on an endless treadmill of payments. ...

A vast majority of personal bankruptcies in the United States are the
result of severe misfortune. One recent study found that more than half
of bankruptcies are the result of medical emergencies. The rest are
overwhelmingly the result either of job loss or of divorce.

To the extent that there is significant abuse of the system, it's
concentrated among the wealthy - including corporate executives found
guilty of misleading investors - who can exploit loopholes in the law
to protect their wealth, no matter how ill-gotten. ...

[O]ver the past three decades the lives of ordinary Americans have
become steadily less secure, and their chances of plunging from the
middle class into acute poverty ever larger. Job stability has
declined; spells of unemployment, when they happen, last longer; fewer
workers receive health insurance from their employers; fewer workers
have guaranteed pensions. ...

[L]ong-term unemployment has become much more common, but unemployment
benefits expire sooner. Health insurance coverage is declining, but new
initiatives like health savings accounts ... further undermine the
incentives of employers to provide coverage.

Above all, of course, at a time when ever-fewer workers can count on
pensions from their employers, the current administration wants to
phase out Social Security. ...

I think the right term is a "debt peonage" society - after the system,
prevalent in the post-Civil War South, in which debtors were forced to
work for their creditors. ...