[IP] Re: Bankruptcy Reform Bites Back

[David Farber <dave@farber.net>]

Begin forwarded message:

From: Dave Wilson <dave@wilson.net>
Date: November 6, 2007 9:13:10 AM EST
To: dave@farber.net
Subject: Re: [IP] Bankruptcy Reform Bites Back

Foreclosure is nothing; at least that's a real asset. The real pain is  
going to begin when people start defaulting on a trillion dollars  
worth of unsecured credit card debt, which up until recently consumers  
have been covering by refinancing their houses. But with that spigot  
closed, credit card defaults -- up until now historically low because  
people have been using their houses as ATMs -- are certain to rise.  
The really interesting fact about the bankruptcy "reform" law, in my  
opinion, it that it was passed at a time when all the authorities were  
insisting that there wasn't a housing bubble, and that if there were a  
bubble, its collapse wouldn't prove a hazard to the broader economy.  
Hard to believe that the pressure for changing bankruptcy laws to make  
it nearly impossible for consumers to ever shed themselves of a soul- 
crushing debt didn't come from the very same people who kept insisting  
that there wasn't any danger that the housing bubble wouldn't collapse  
and leave millions of Americans saddled with several lifetime's worth  
of debt...

-dave


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