We implore you to help prevent "The Bankruptcy Reform Bill" from becoming law.
In our combined 52 years as consumer advocates, helping Americans manage their debts, we have not come across even one person who was "working the system." i.e., taking advantage of bankruptcy protection to further their own selfish aims. For that matter, we have never spoken with anyone who didn't want to find a way to avoid bankruptcy.
Through layoffs, a serious illness in the family, and/or a divorce, perhaps compounded by other unexpected life events, many of your hardworking constituents may find themselves in financial disaster, often pressured heavily by debt collectors.
All they want is a chance to get back on their feet. But without a job or good health insurance, with a deadbeat for an ex, three kids to support, and a pile of student loans that'll never be paid off - it's not easy. There's no reason for Congress to make it harder on them than it already is.
The likely effects of this bill are that:
Debt collection harassment (already the top industry complaint received by the FTC) will become even more frequent and abusive.
Economic recovery will be much slower for those who have no choice but to file.
Taxpayers will pick up the tab for the additional resources needed at already clogged bankruptcy courts, while lenders boost their bottom lines by squeaking out a few more pennies from the people who can least afford it.
The proposed law's "one size fits all" formula will wreak havoc for many families whose unique circumstances make them worthy of an individualized, thoughtful plan to get out from under.
Lenders want you to believe that they are being ripped off by greedy consumers, but it's simply not true. What is true? Large credit card companies aggressively market credit to consumers at sometimes sky-high interest rates, then turn around and cry foul when those consumers are unable to make the payments. In fact, many of these well-known and powerful lenders have been subjected to regulatory actions for unfair marketing practices and risky lending to people already deeply in debt.
Your constituents are losing jobs or worrying they may be next. Whatever money they had saved and invested has shrunk before their eyes. With the economy stalling, layoffs increasing, and pensions as well as savings dwindling, now is not the time to take away what little safety net our current bankruptcy laws offer.
Again, we implore you to vote for the folks in every Congressional district, in every state, who struggle to get by, paycheck to paycheck, but sometimes need a helping hand, not a heavy hand. Please vote NO on "The Bankruptcy Reform Bill."
Gerri Detweiler, author of The Ultimate Credit Handbook, co-author of Invest in Yourself: Six Secrets to a Rich Life, and Slash Your Debt: Save Money and Secure Your Future
Nancy Castleman, co-author of Invest in Yourself: Six Secrets to a Rich Life, and Slash Your Debt: Save Money and Secure Your Future, editor of The Pocket Change Investor
Marc Eisenson, author of The Banker's Secret, co-author of Invest in Yourself: Six Secrets to a Rich Life, and Slash Your Debt: Save Money and Secure Your Future