Economic Slavery for consumers and small business owners? The new American Bankruptcy law? why you should not borrow or take mortgage so easily in America
Staff Reporter
Apr. 17, 2005

Think a hundred times before borrowing if you live in America. Think many times before you come close to a loan shark! A new law does not allow consumers and businesses to walk away without paying the debt so easily. The implication on credit card holders is very serious. One of the safety net the credit card holders in America had is to declare a Chapter 7 Bankruptcy that wiped out the credit cards debts and student loans that are mostly unsecured. The law does not even consider the needs of American Veterans servicing the American Military. The small businesses will have real hard time operating under the new bankruptcy law. The new law takes the safety net out for small businesses and consumers. This can be a serious disincentive for small entrepreneurs and may cause a long-term depression in American and World economies. When a small businessperson starts a business, he or she takes enormous risks. Sometimes these risks become a real threat and results in collapse of fiscal viability of the firm. At that moment if the business is forced to collapse instead of getting a chance to survive and come back in full force, then there is no meaning of starting a small business in America.

The lawmakers in America did not understand the need of the American consumers and the small businesses. The burden on the uninformed young consumers is also high. The new law requires the Federal Reserve Board to study: is there a correlation between credit card debt created in college and bankruptcies? Credit industry sales people continue to swoop down onto American college campuses under the watchful guidance of campus administrators. "Stipends" is what credit card companies pay them without any regard to how the student can ever pay back the credit card loans in thousands of dollars.

The full auto loan must be paid or lost to repossession even if the vehicle is not worth the outstanding balance. There is case after case where a slick car salesman has sold a car to someone who was far too young and/or inexperienced and set high interest with outrageous payments far and above anything affordable. The owner 6 months later then realizes the error and is faced with only one option... bankruptcy. Rather than this new hardship for the unwary, perhaps the US government should be more concerned with the unscrupulous practices of some dealers in a very slick industry.

The new law "makes it easier for landlords to evict bankrupt tenants who are behind on their rent." For a debtor who for whatever reason is far enough down that bankruptcy is needed, it is very bad. I''m so bad off I can''t even pay my rent. So I declare bankruptcy and within a few months I might be able to catch up on the bills that I keep... such as rent. But now the courts permit me to be evicted more easily so where do I live and who is going to rent to me without a major deposit, which I can''t afford?

The new law for the first time imposes on the bankruptcy courts a strict “means test?to make sure people with assets repay some of their debts.

Michigan’s Rep. John Conyers, who led the democratic opposition to the bill, said it “massively tilts the playing field in favor of credit card companies?but does nothing to discourage banks and credit card companies from “reckless lending?to consumers with little ability to repay their debts.

The bill really gives a blank check to the loaners like banks, credit card companies and other financial institutions including car companies ?if they hook you into expensive loans, they can suck the blood out of you for the rest of your life.

Small businesses and the consumers will all falter with this new bankruptcy law. It is start of trend ?economic slavery that can depress world economies over time.

Think hundred times before taking a single dollar loan from these loan sharks ever. The new law will eventually hurt these loan sharks as well when people understand what is happening and that they need to stay away from these modern day sharks running around among us in the modern civilization.

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