The median income for that state would be the determiner for which treatment is used. This is eminently fair. Those with greater incomes are able to pay back more of their debt. Those with lesser incomes are deemed LESS able to do so. This is the same argument underpinning the graduated income tax. Rememeber how that is touted as fairer? Those with with the greater ability to pay....

Does the new law help the banks and credit card companies? Yes, their risk of loss is lower.

Does it help future borrowers (YOU and ME)due to the fact that the lenders have a lower risk of loss? Yes

Does it hurt the desperately poor? No,they can still go bankrupt.

Are there some in the middle who previously could abandon their debt easily and now might have to pay some/all of it back? Yes--

But the question really comes down to who and how many of us should receive the benefit of the bankruptcy law. In all likelihood far more people will indirectly benefit compared to the few who will be financially-handicapped temporarily.
Once the rules are more generally known, it will become clearer how and when individuals may use the law beneficially in their particular case. Or conversely, they must assume some responsibility for their own actions in borrowing.
Don't worry---the legal profession will be sure to publicize the trade-offs and put it right in your face in the near future.

Posted by: Jack Denny at July 31, 2002 10:58 AM

While the Scheer column strikes me as over-the-top, i think he is on the right side of the issue. And i logged 10 years in credit card marketing.

Just as no one forces a consumer to take on debt, no one forces MBNA to mail out 400 to 800 million new card offers each year. They factor the risk under the current laws into their selection and credit models. If they thought

Posted by: craig henry at July 31, 2002 02:17 PM

Jack -- Thanks for that thoughtful info.

Posted by: Matt Welch at August 1, 2002 12:09 AM
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