my occasional musings on life, love, art, perfume ... what else is there?


Malice? Or Incompetence?

I'm sitting here, Saturday morning -- the wind is whipping around the house as I write.

I just scanned the New York Times webpage -- and impressed myself when I recognized a guy I used to sit next to at the synagogue where I was converted -- a former Republican city councilman who's somehow risen up the ranks to be an assistant to Condoleeza Rice and an ambassador who's very verbal about fighting against human slavery. Verbal. I guess results are supposed to come later. So much for six degrees ... from effectiveness. But at least he's trying. It must be hard to do humanitarian work in this administration.

I move over to the Washington Post, and an editorial line at the bottom caught my eye. Something about "Warrantless wiretapping and immigrant bashing: What else can Republicans run on this year? Their competence? Their ethics?"

And that streamed my consciousness to the Bankruptcy Law class I'm taking this term.

Most of us are blissfully unaware that bankruptcy law in this country has been completely revamped within the past year. The option for a "fresh start" in Chapter 7 bankruptcy -- the discharge of nearly all one's debts -- is now nearly impossible to qualify for. A good thing, most of us would say. People should take responsibility for their debts. Learn to live within their means.

On the face of it: of course. But what this law will do in practice will drive the pain, the misery index, of those already suffering economically, through the roof.

My instructor -- a practicing attorney -- alternates between railing against this poorly constructed, legislated "reform" and reminding us that it's the law. And we need to learn how to apply it.

While she's railing, she takes us through the bankruptcy petition and schedules -- like a 1040 tax form -- that is often a paralegal's job to complete.

We take our pretend client through the "means test" that's required of anyone attempting to declare Chapter 7 (most will fail this test and be compelled to file Chapter 13, reorganize their debts and file a payment plan -- whether they can actually pay it or not).

As part of the process (and I'm giving you loose numbers in this example but, believe me, there is truth in this) we find out that if he's head of a family of four and makes $24,000 -- he will be allowed approximately $300 a month to feed his family.

But if he makes $90,000, he'll be allowed $1200 to feed that family.

Think about this. You are both in debt up to your eyeballs. You both are asking the court for relief from the debt. But one of you makes three times more than the other. And that is the difference between feeding your children whole milk -- or being required by the law to feed your children powdered milk. Because of your difference in income.

Both clients will feel pain in this process.

The hypothetical $90,000/year Boeing engineer will have to undergo a tremendous lifestyle change to make his way through Chapter 13. But food for his kids will probably not be an issue.

The $24,000 construction laborer, though, will choose whether he can afford gas to get to work or food for his kids, after his repayment plan is in effect.

Did the "reformers," heavily influenced by creditor lobbyists, think about these repercussions when they slammed this through last year?

My instructor's mantra is "Was it incompetence? Or malice?"

Did the legislators not know the effect of this law will probably be to drive the poorest further into an underclass that abdicates their debts totally, changes their names and makes what existence they can in a gray market of non-documented, under-the-table workers? Whose marginal lives, by the way, contribute nothing to the tax roles?

Or did they know, and not care?


Blogger katiedid said...

I think this is yet another reflection of the not-so-subtle philosophy in our culture that wealth = virtue. If the poor man is poor, it is his own fault, which means he's lazy, which means he's less virtuous than someone who went out and got rich, which means "why should we care when it's his own fault?" (Nevermind the ENTIRE subject of how socio-economics plays into that.) I don't think they cared, because they don't see what there is to care about. Maybe I'm very cynical at this stage in my life, but that is how I perceive the motivations of lawmakers who create laws in this sort of fashion.

10:09 AM

Blogger katiedid said...

Oops, what I wish to add is that I don't think it's malice or incompetance. It's indifference, which is a much more insidious and frequently more evil beast.

10:11 AM

Blogger Dan said...

I think that they knew and that they didn't care. They were too busy shaking the creditors hands and thinking that this would somehow be good for the country.

Seriously, there are times when I just wish I lived in a less capitalist state.

10:58 AM

Blogger still life said...

I am going with the latter of the two choices; that they knew and did not care. Why would they care, it will not affect their own lifestyle in any form as bankruptcy is not hovering over their future nor anyone in close surrounding. Another upside down, backwards law.

11:51 AM

Anonymous logo said...

I have seen bankruptcy up close, through a family we were very close to, and even under the OLD legislation it was difficult and degrading.
This couple ended up moving in with his parents, along with their three teenaged children.
Then things got really ugly.

We tend to elect those who do not know, and do not care to know the realities of life for the middle class, never mind low income earners. How can we be suprised they ignore those needs?

11:47 PM

Blogger Atreau said...

I'm wondering if it's a case of them not really knowing and not really understanding how difficult it is not only survive but to be able to thrive out of a lower socio-economic group.

The pilot episode of 30 Days with Morgan Spurlock (of Super Size Me fame) showed him and his fiance struggling to make eds meet on a minimum wage salary and how easy it was to get into debt when unexpected health issues arose.

I think it isn't just our leaders but the population at large that isn't quite grasping how low minimum wage is and really how little that money goes.

1:34 AM

Blogger Lulu said...

With regard to Katiedid's first point, I read somewhere recently - and it had never occurred to me that it was so obvious - that this is the reverse side of the American Dream - if anyone can make it, and anything is possible as long as you work hard and try, then, as she says, if you then don't make it, it must be your own fault. If you add to this the tendency of people who *have* made it to accept the Dream theory because it flatters them and makes them feel good about themselves - i.e. they are successful entirely through grit and determination - then you have this supreme lack of empathy or at the very least sympathy for the poor.

I don't quite feel this in the UK. Yes, we have a capitalist society, but in the post-Thatcher years we've had a kind of backlash against it. A lot of the politicians and lawmakers here are, like me, first-generation middle class - with working class parents who struggled to send them to university - and I for one, when I see people begging on the street, think 'There but for the grace of God...' We have many alarming TV programmes showing how people 'just like us' slip from being employed and housed into serious debt, and how young people brought up in abusive households leave home at 16 to avoid the abuse and never get a chance of being employed and housed, and all the other people on the scale in between, to whom things happen.

Not that we help them very much, either - they are always trying to reduce the qualification for invalidity benefit, for example, inventing ridiculous tests like if you can walk five steps unaided then you are not entitled to it - but at least there isn't quite the same divide, the same feeling of security and of being on the safe side of some economic Berlin Wall, in the middle classes. I think, but I may be wrong, that we recently changed bankruptcy laws here so that the bankruptcy is completely discharged after 2 or 3 years. Can't remember which, but it was definitely made shorter.

5:25 AM

Blogger Jemima said...

But we need to keep the rich as rich as possible so they can buy up the products and services the lumpenproletariat suffer to provide. That way money will trickle down and all will be well, prosperity for all. I think that's how the argument goes.

5:25 AM

Blogger actonbell said...

Good question! And great comments, too.
This administration is SO out of touch. I think the answer is some of both--they have a low opinion of poor people AND they just don't understand what they've done. You KNOW the president doesn't understand the numbers!

7:49 AM

Blogger Fred said...

The credit card companies helped to draft the law, gave money to the appropriate people who returned the favor by voting for the bill.

Politics 101. It sucks.

9:54 AM

Blogger Urban Chick said...

reading what you wrote, i'm guessing too that it's indifference but i don't know

this side of the pond i'd say that, for all his government's faults, tony blair's government is broadly genuine about its desire to tackle poverty and deprivation

for instance, under the last conservative administration (mrs thatcher and then mr major), the number of british children living below the poverty line TREBLED

it was 1 in 10 in 1979 when she took office and nearer to 1 in 3 when the conservatives were voted out 18 years later in 1997

this administration has a goal of lifting all children above the poverty line by 2020, which is highly laudable

let's just hope they get there...

11:26 AM

Blogger Bela said...

Perhaps we should go back to the Victorian notion of 'the deserving poor' and treat people who find themselves bankrupt through no fault of their own differently from those who decided early on they were going to live above their means and didn't quite manage to pull it off.

I'm joking. Er, I think I am.

Incompetence has a funny way of turning into malice sometimes. Quite often.

Great post & comments.

11:31 AM

Blogger Tan Lucy Pez said...

This makes my stomach hurt! It's so awful. The public needs to know this.

1:58 PM

Blogger dddragon said...

okay, that's REALLY scary!

2:53 PM

Blogger Kyahgirl said...

this is an excellent and informative post.
the laws are different in Canada but I actually went to see a bankruptcy councelor after I ended my first marriage. I was terribly in debt, couldn't sell the house with its huge mortgage and was almost willing toss it all in, just to get out from under it. For a person to feel so desperate its a hard thing. I feel sorry for the people stuck in your system. It looks like its designed to make them suffer, when they are already down.

I didn't go through with the bankruptcy eventually, just couldn't bear to give up the one thing I had left, a 15,000 retirement savings account which I couldn't touch anyway. Its long the end it was worth it to have my life back. Sorry to rain on your blog M.

8:45 AM


Post a Comment

<< Home