Wednesday, March 09, 2005

Bankruptcy Is Fun!

I'm appalled that the senate is close to enacting tougher bankruptcy measures. For years, credit card companies have been offering their services to an increasingly young and risky clientele. The interest rates on such cards are preposterous. I find it ironic that credit card companies are willing to make a killing on interest rates for their cards but refuse to accept any risk associated with such actions. If they're willing to give anybody a credit card, then they must face the consequences.

Moreover, bankruptcy is not easy. If you've known anybody that's declared bankruptcy, you know it's no walk in the park. Senator Politician says, "I know! Let's make an already heartbreaking process tougher! That'll teach 'em!" The system is fair as is. Companies take risks when lending and make a huge profit as a result.

Leave it to politicians to protect big corporations while hanging the average American out to dry.


Blogger mindful said...

Especially considering the aggressive marketing tactics of most of these companies, it is entirely on their own head if someone defaults on them. They know the bankruptcy laws; they know the risks they take.

That being said, if these measures pass I would think it only right if these companies, now protected from much of the risk in issuing a credit card, significantly reduce interest rates and other penalties. But I'm guessing that won't happen.

9:45 PM  
Blogger mindful said...

Also, there is a very detailed special blog about this issue over on talking points memo.

11:10 PM  
Blogger Vavoom said...

How right you are, mindful. I agree, interest rates should drop. I also agree, there's little chance that'll happen.

11:42 PM  
Blogger thc said...

I'm sorry but no one is holding a gun to your head to get you to apply for a credit card. And no one forced you to buy a flat panel TV that you can't afford. Take some personal responsibilty folks. I have no sympathy for someone who applies for but cannot handle the responsibility of a credit card. Learn to say "no".

9:32 AM  
Blogger mindful said...

I have no sympathy for a company that can't make good lending decision. Nobody forces the credit card companies to give their money to the poor, the sick, or the irresponsible.

Furthermore, not everybody who goes bankrupt is just irresponsible. Sometimes bad luck can get you down. That's why bankruptcy can be a beautiful thing. It allows you a chance to recover. Under these new laws, one run of bad luck can follow you around for the rest of your life. Do you really want to punish someone (anyone?!) like that?

2:23 PM  
Anonymous little john said...

Thanks you THC!

2:25 PM  
Blogger Vavoom said...

thc: Declaring bankruptcy *is* taking responsibility for reckless spending. Big corporations also must take responsibility for their actions. If you are such a big fan of folks taking responsibility then why not leave the system as is? People take responsibility through bankruptcy. Lenders take responsibility for their shoddy business practices by losing money. Sounds like leaving things as is is more compatible with your need for personal accountability.

2:27 PM  

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