“The bankruptcy reform bills now before Congress and already backed by the banking industry, are bad for consumers. One of the bills has already passed the House of Representatives, even though it is not supported by bankruptcy judges, law professors bankruptcy lawyers.
The bankruptcy bills now before Congress give certain credit card debt priority equal to unpaid taxes and overdue child support, and make the IRS the national standard for living expenses rather than actual living expenses controlling in bankruptcy repayment plans. These national standards have no relationship to the cost of living in South Jersey and the Philadelphia area. Further these bills require the filing of a debtor’s tax return for the court, where they are available to anyone. As a lawyer who concentrates in bankruptcy, I am concerned that the debt relief procedure under this bill will become more litigious and therefore more costly to those who can least afford it. It will skew the system even more in favor of the institutional creditors with unlimited funds for legal fees. The banking industry has reportedly spent $40 million promoting this “reform.”
The over-extension of consumer credit was not caused by the Bankruptcy Code, and making bankruptcy less available will not create more money in the budgets of those who are buried in debt. The credit industry has aggressively extended credit to more and more marginal borrowers, Why should the bankruptcy courts become a collector for the credit industry without reform on its part?
Lee M. Perlman, Esquire
September 1998