Dark Bilious Vapors

One of the many reasons I despise Harold Ford Jr., and look forward to the election day that he loses his Senate bid (it'd be most wonderful if he loses the primary to Rosalind Kurita, but most certainly he will go down in defeat to the Republican candidate) is his vote in support of the laughingly styled "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". A couple items in the past several days bring this back to my attention....

Over at The Flypaper Theory, autoegocrat, in the context of a long post titled Demystifying opposition to Uncle Junior, puts Ford's support of the Bankruptcy Act in the greater context of Ford's betrayal of his constituency:

But Ford's seeming need to cut up your safety net and sell the pieces back to you does not end with Social Security. The onerous Bankruptcy Bill, which was literally written by lobbyists for the credit card industry, represents another feather in Ford's Republican hat. That bill creates a windfall for the banking and finance sector while at the same time dropping the floor out from underneath the middle class. Under the law, if you're middle class and you get overwhelmed by medical bills (the number one reason people file for bankruptcy), you must pay back every dime.

Bankruptcy protection is a much older concept than Social Security. It goes all the way back to Mosaic Law, when it was decreed that debts should be forgiven every seven years. Again, here is another example of Ford screwing around with longstanding safeguards for ill fortune in the service of his personal political ambition. The big difference here is that he isn't giving the shaft to the poor, this time he's dumping on the middle class. The Bankruptcy Bill only kicks in if you're above the median income, but under the law, if you can't pay your bills, your creditors can come take your house. In other words, if you're middle class and you get too sick, you won't be middle class for long.

The outright self-serving betrayal of not only the Democratic Party, but also his constituents, that is represented by this vote cannot be understated. Harold Ford Jr. represents the 9th District of Tennessee, in effect, the city of Memphis. Memphis has the highest personal bankruptcy rate in the nation. Memphis also has the shameful distinction of being the nation's capital for infant mortality. The coincidence of these two statistics in one place is no accident.

Poverty and infant mortality are linked together like war and death. Where you have one, you will always have the other. And the representative of a city where 40% of the people live below the poverty line (I'm one of them), a city that is America's twin capitol of financial ruin and baby death, voted for a bill that is going to thin out the middle class in this city like a lion in a herd of antelopes.

...

When asked about his support for the bill, Ford's answer was just as disingenuous as it was insulting to his constituents:

"Two-fold: One, I think the real issue with regard to credit in this nation has to do with credit agencies, reporting agencies that determine your credit worthiness. If you're a college student, and you're late paying your phone bill because you have no job or because you've been flooded with credit-card requests from banks and credit-card companies alike, I believe that after you've satisfied that debt it should be erased from your credit history. Banks and other creditors base how much they will expend to you in credit and money on those numbers. The bankruptcy bill in a lot of ways just wanted to pin the blame on financial institutions. They are part of it."

And I thought that the idea of urging personal responsibility is a smart thing. The incidences of bankruptcy in Memphis and in this state are high. I've introduced legislation to to make it a law where lenders have a responsibility to share with borrowers all of their rights and all of the legal responsibility that comes with taking out a loan or borrowing money from an institution. And that banks have a responsibility to know the payback power of those they lend to. That, I think, is the better route, because, even if we didn't have a bankruptcy bill, we would still have the problem of under-educated or uneducated borrowers in this country."

Ford understands neither the causes nor the effects of personal bankruptcy, or even the very bill he voted on. His non-answer, while not addressing the question at all, is still revealing. To him, predatory lending practices are the fault of the borrowers who don't take the time to learn all the different ways they can get screwed when they're in a financial bind and need a lifeline. This is classic Republican thinking: rig the system against the poor, and then blame them for getting caught in the trap.

MEMORANDUM OPINION

On December 20, 2005 at 10:00 a.m., the Court held a Show Cause hearing as to why this case should not be dismissed for failure of the Debtors to file a Certificate of Credit Counseling. The Debtors appeared pro se but had copies of pleadings which had been filed that morning by James R. Chapman, Jr., the proposed attorney for the Debtors. Such pleadings included a Response to the Court's Order to Show Cause. Additionally, the Debtors answered questions of the Court at the hearing.

This is core proceeding under 28 U. S. C. §157 as it is a matter both arising under Title 11 and in a case under Title 11. As such, the Court has the jurisdiction to enter a final order in this matter pursuant to 28 U.S.C. §1334(a} and (b), 28 U.S.C. §157(a) and (b) (1), 28 U.S.C. §151, and the Standing Order of Reference from the United States District Court for the Western District of Texas of all bankruptcy matters.

Statement of Law

The Congress of the United States of America passed and the President of the United States of America signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act") It became fully effective on October 17, 2005. Those responsible for the passing of the Act did all in their power to avoid the proffered input from sitting United States Bankruptcy Judges, various professors of bankruptcy law at distinguished universities, and many professional associations filled with the best of the bankruptcy lawyers in the country as to the perceived flaws in the Act. This is because the parties pushing the passage of the Act had their own agenda. It was apparently an agenda to make more money off the backs of the consumers in this country. It is not surprising, therefore, that the Act has been highly criticized across the country. In this writer's opinion, to call the Act a "consumer protection" Act is the grossest of misnomers.

...

Simply stated, if a debtor does not request the required credit counseling services from an approved nonprofit budget and credit counseling service before the petition is filed, that person is ineligible to be a debtor no matter how dire the circumstances the person finds themselves in at that moment. This Court views this requirement as inane. However, it is a clear and unambiguous provision obviously designed by Congress to protect consumers.

Facts of this Case

In this case the Debtors admit they did not seek or request the required credit counseling services from an approved nonprofit budget and credit counseling agency before filing their case even though they talked to Mr. Chapman by telephone prior to filing and he rightfully advised them to do so. Instead they filed this Chapter 13 case on December 6, 2005, "as an emergency measure to stop foreclosure on their homestead. See Debtors' Response to Court's Order to Show Cause. The Debtors responded to the Court's question as to why they waited so long to file their case by stating that they had been working with the mortgage company to determine the exact amount that was owed but that the lien holder had refused to accept payment at the last moment and that was what necessitated the emergency filing of bankruptcy.

Mr. Sosa has now undergone his credit counseling on Friday, December 16, 2005 and filed a Certificate. No certificate has been filed by Mrs. Sosa.

Decision

One Debtor has now substantially complied with the intent of the Act by undergoing the required credit counseling. One has not but still could within the time limit if a waiver could be granted. However, because the Debtors did not request such counseling before they filed their case, Congress says they are ineligible for relief under the Act. Can any rational human being make a cogent argument that this makes any sense at all?

But let's not stop there. If the Debtors' case is dismissed and they re-file a new case within the next year, it may be that some creditor will take the position that the new case should be presumed to be filed not in good faith. See 11 U.S.C. §362(c) (3) (C). Section 362 further states that if subsection (c) (3) (C) applies, then the stay in that second case will only be good for thirty days unless the debtor (i) files a motion, (ii) obtains a hearing and ruling by the Court within such thirty-day period and {iii} proves by clear and convincing evidence that the second case was filed in good faith. It should be obvious to the reader at this point how truly concerned Congress is for the individual consumers of this country. Apparently, it is not the individual consumers of this country that make the donations to the members of Congress that allow them to be elected and re-elected and re-elected and re-elected.

The Court's hands are tied. The statute is clear and unambiguous. The Debtors violated the provision of the statute outlined above and are ineligible to be Debtors in this case. It must, therefore, be dismissed.

An Order of even date will be entered herewith. Congress must surely be pleased.

Len on 02.03.06 @ 08:04 PM CST