"The Woman The Credit Industry Doesn’t Want You to Meet"
There’s been a lot of talk about the new bankruptcy “reform” bill passed last Thursday by the Senate Judiciary Committee.
Not much of that talk has included examples of how the new law will affect real people. But it should. Here’s how Rose Shaffer, a nurse from Chicago, described her sudden descent into bankruptcy:
A week [after suffering a heart attack], Shaffer received a bill from [the hospital] for the three days she’d been hospitalized. It was for $18,000. Shortly thereafter, [the hospital] began sending letters to Shaffer demanding payment. Then, a summons to appear in court was tossed on her porch…Under pressure from [the hospital] and now behind on her mortgage payments, Shaffer filed for Chapter 13 bankruptcy in December 2002…”The hospital saved my life, but now they were trying to kill me,” Shaffer says.
Her story is not unusual. A recent Harvard study found that (1) medical emergencies contribute to almost 50 percent of bankruptcies, and (2) most people who go broke due to illness do so despite having decent jobs and insurance.
The new bill would severely limit debt relief for people like Rose Shaffer. It would also:
• Post detailed information about filers and their bankruptcy on the Internet;
• Require filers to attend mandatory financial management courses, no matter the reasons for their bankruptcy; and
• Implement a complicated “means test” for all filers, which requires itemizing, detailed documentation…and huge attorneys’ fees.
Few people use bankruptcy as a “convenient financial planning tool,” as Sen. Charles Grassley (R-IA) claims. Most are trying to pick up the pieces of their lives, often shattered by events beyond their control.
— Ryan Spears