A Facile Approach to Bankruptcy Issue

The current effort to reform our antiquated bankruptcy laws has too frequently received criticism by individuals who are so intent on telling a good story that they are willing to ignore the facts.

This sort of storyteller appears to have influenced Liz Pulliam Weston’s column on bankruptcy reform [“It May Be Now or Never If You Want to File Personal Bankruptcy,” Money Talk, June 9].

Although current bankruptcy laws mostly serve people in true need, a percentage of relatively affluent individuals have become quite skilled at exploiting the system in order to walk away from debts that they could otherwise have paid, at least in part.

Bankruptcies cost the American economy $44 billion in 1997. While most of that cost is justified and largely unavoidable, a significant part of it results from reprehensible bankruptcies of convenience that allow individuals from higher income brackets to disperse their financial misfortune throughout the general public.

The burden that bankruptcies of convenience place on the shoulders of hard-working Americans grows a little heavier with each day that passes without bankruptcy reform. This burden does not have to be nearly so heavy.

Bankruptcy reform has advanced this far simply because the need to restore fairness and personal responsibility to our flawed bankruptcy laws is so clearly evident.

GEORGE J. WALLACE

Member, Eckert Seamens Cherin

& Mellott

Washington

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* The new bankruptcy laws are in the hands of the lenders and their politician cronies. It will become more difficult for the average person to start over.

Restrictions on wiping out debt are to become more difficult after the first of the year.

The Senate failed last November to pass an amendment to the bankruptcy bill sponsored by Christopher Dodd (D-Conn.) to make new credit card customers under the age of 21 either have a qualified co-signer or show independent means of paying off their debt.

Lenders have the right to increase interest rates to 21%, 25%, 27% if one payment is delinquent or the borrower has too much debt per lender regulations. No one can ever pay off this kind of interest.

Credit cards are just too easy to obtain. If you are living paycheck to paycheck, it is too easy to grab that credit card when a child needs new shoes or there is a medical emergency.

There needs to be reform, but it should occur in bank lending practices.

JOHN EMBRY

Los Angeles