There are opinions on John Oliver, right and wrong. John Oliver is a brilliant comedian and observer of human and political nature, as you’ll see by watching one of his recent shows on bankruptcy.
But as an attorney who deals with debt and bankruptcy daily, I have a different take. Don’t get me wrong, his research team is outstanding, and they did the best they could to break down a complex subject into a monologue-sized bite. Here are my takes on it as a bankruptcy attorney.
It says on Elizabeth Warren’s website that the government set up the bankruptcy system to help a certain class of people and discourage others. We know that there is a systemic bias against women, minorities, and the poor and in favor of men, white and well-off classes. But did you also know that in 2005 senators voted down rules that would have allowed parents filing for bankruptcy to buy their kids toys and books? Or even basic recreational activities like playing a sport, joining scouting programs, or even being able to go to a splash pad in the heat of summer? In the same bill, they voted down rules that would have allowed union members to keep paying their dues while in bankruptcy. Time and time again, in 1978, 1984, 1998, and 2005, ‘reforms’ have made it harder to access a constitutionally protected right to bankruptcy while whittling away at fairness in the code.
Which is why it’s going to be a heavy list. Banks can hire lobbyists, and dark money non-profits are focused on shifting the burden from the wealthy and ‘corporate persons’ to the ever-decreasing middle class. While jobs increase, the wages they pay are not the kind that can support a single person, much less a family. The gig economy arose ostensibly to allow people to work two, three, or sometimes four jobs just to keep food on the table and a roof overhead. Like most other low-paying jobs, the result was legally substandard wages, with the ‘contractor’ paying all taxes and expenses and a need for government subsidies in the form of SNAP, housing assistance, and other programs. Stagnant wages keep American earning power at 1983 levels with 2021 prices, and people are fighting to hang on.
While politicians tout the actual rise in income, those numbers are skewed by rapid gains at the top five percent of earners; in fact, the divide between upper-income families and middle-to-lower income families is growing. Advantages are accruing to the top earners, while earnings and access to equal representation are falling for everyone else. These are the inequalities decried in ‘Third World’ countries, but they are happening right here in America – and being voted into law by those supposed to represent the American people.
Reforming the bankruptcy system would immediately help the working people with items on the table such as the ability to discharge student loans in bankruptcy or creating special classes of debtors such as people with private student loans and medical debts. Likewise, the ‘cruelty is the point’ sections that harm families and children would be repealed. It would level the playing field that millionaires use to protect homes, cars, and prized possessions or allowing the rich to create protected assets in states like Florida by creating a uniform Federal Homestead exemption and the ability to modify a mortgage in bankruptcy. Since communities of color have more wealth in their homes, bankruptcy would make it easier for POC to file if they knew that they wouldn’t immediately lose the investment in their house.
The bankruptcy system could also stand to lose the frequently insulting credit counseling process, which even judges have called insulting and irrelevant. Get a higher-paying job? Complete your degree with more student loans? There are no formal certifications for credit counselors, though the companies they work for have to be certified through the courts as acceptable. It also attached a stigma to filing for bankruptcy when the Court assumes from the start that people filing for relief are liars, crooks, or spendthrifts.
The banks and Wall Street have a culture of defining the deserving/undeserving, the good and bad, the people living the ‘right’ way, and the people making ‘bad decisions.’ For many bankers, they’ve never spent a day in their lifetimes in a food bank line or had to choose between medicine and keeping the lights on, paying for health insurance, or fixing the car. They have been privileged to have their hard work and the advantages of birth or mentorship to smooth their way into high-paying jobs. It’s easy to think that people need to make better choices when they need better circumstances.
Old habits on Capitol Hill are just as hard to break, where lobbyists and experts can drown out the voices of the people. With the advent of the internet, the people can speak loudly, demand reform, and network with one another, but politicians can be stuck in the 20th century – when most of them were born and first elected. Indeed, some of them have a knee-jerk reaction after so many years of holding onto office when it comes to lobbying. Many of these ‘reform’ bills were voted in by the very senators still in their seats, and the calls of the lobbyist and contributions are heard over the needs of their constituents.
We’re not living in an ideal world, but there are ways to do a bankruptcy with kindness and compassion, even a firm that will let you pay in installments. This is what makes the Van Horn Law group different. Call us for a free consultation at any of our offices, and let us help you get the debt relief that suits you best. Call (954) 765-3166.
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