The Republican-dominated Congress is on the verge of changing the nation's bankruptcy laws to make it easier for the hugely profitable credit card companies to get their money back and more at the expense of the nation's poor.

The big banking interests have been trying - and failing - for the past four congressional sessions to make it more difficult for financially beleaguered Americans to file for bankruptcy, tipping the balance in favor of the nation's big financial interests.

This time, though, the legislation is all but assured of passage in both houses, thanks to gains made by Republicans in the 2004 elections. Wisconsin is playing a role in the debate. Rep. James Sensenbrenner, who represents silk-stocking suburban Milwaukee and has long been a toady of special business interests, not surprisingly is leading the charge in the House.

The "reform" is ostensibly needed to counter those who are abusing the current system by running up large debts and then wiping them out, leaving banks and credit card companies high and dry.

But the extent of those abuses is open to debate. It is known, however, that one of the leading causes of bankruptcy, especially among Americans over 50, has long been devastating medical bills not covered by insurance.

This Republican-dominated Congress would rather pass legislation favoring the wealthy and powerful than tackle the nation's shameful health care system that has left 42 million Americans without any medical coverage.

The "reform" package would require bankruptcy filers to pass a means test. If their incomes are above a certain poverty-line linked level, they wouldn't be able to file under Chapter 7, where all but a few debts are wiped out. Rather, they would be required to file under Chapter 13, which requires specific payments to creditors over a set number of years.

As usual, the bankruptcy law rewrite is aimed only at the little guy. There is absolutely no attempt to rein in the credit card companies that shower every American household with dozens of enticing credit card offers every month, whether they are poor credit risks or college students with no income to repay bills.

"What the credit card industry has been doing the last 10 years is akin to sending free samples of alcohol to alcoholics," says Travis Plunkett, legislative director for the Consumer Federation of America.

All segments of society have been affected. Veterans, for example, are being counseled by American Legion Magazine this month about the "debt trap" from too much credit card use.

"Paying the minimum payment every time on a $5,000 credit card debt at 21 percent interest will require 1,040 payments to clear the debt," the article points out. "Beyond the $5,000 principal balance, $32,198.66 in interest will be paid."

Now that's the kind of abuse that our lawmakers ought to be concerned about.

Instead, representatives like James Sensenbrenner work overtime to punish some poor bloke down on his or her luck so that the moneyed interests, the ones who grease their palms, can collect even more.

Copyright 2005 The Capital Times

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