Joe D. Jones, CPA MBJ Publisher Congress is once again toying with reforming the bankruptcy laws. A recent Senate bill would amend the bankruptcy code to make it somewhat more difficult for middle-income consumers to escape all their debts by filing Chapter 7. The House passed a similar bill last year. The lenient provisions of the 1978 bankruptcy code coupled with easing of credit availability has created a situation where more than a million Americans declare bankruptcy each year.
Credit cards seem to be a major culprit.
Today, credit card debt has increased by a factor of 50 as compared to 1968. This evidence is probably sufficient to convict credit cards of being a national travesty. It would be easy to blame the credit card companies for making their product so easily available. The exorbitant rates of interest charged make paying off a credit card difficult. On the other hand, the interest rate is required because of the exorbitant rate of default by card holders.