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Few recent legal topics resulted in more controversy than the new
laws relating to bankruptcies and neo-con reforms. In most cases,
bankrupt status results from factors beyond the control of ordinary
citizens. Life's emergencies are responsible for over 80% of all
personal cases filed. Most notably, medical bankruptcy accounts for over
50% of all cases because of the continued escalation of hospital care
and prescriptions, while a growing segment of our population cannot
afford health care coverage.
The next largest category is driven by unemployment. With jobs being
eliminated with wholesale abandon - globalization costs American
families hundreds of thousands of jobs each year due to no fault of
their own. The promise of under-employment at 50 cents on the dollar
does little to prevent continued bankruptcies. Contested divorce is the
third largest contributing factor, yet based on a pro ratta percentage
of the general population, remains at a fairly constant level when
adjusted for population growth.
Insolvency & Bankruptcies
No one filing bankruptcy is required to prove their estate is legally
insolvent or results in a negative net worth. Critics claim this
conspicuous omission constitutes a loophole in Code that allows
consumers to discharge credit card debts unfairly, while retaining homes
to the extent of an allowable exemption. Legal scholars and economist
however disagree.
Exemption statutes limit the value of total assets that may be
retained to a level deemed essential by the state legislature for
continued survival, employment, and rehabilitation of productive
taxpayers. To allow reform of legal requirements for filing bankruptcies
to be driven solely by the agendas of creditors results in a one-sided,
often short-sighted national policy that punishes debtors to the point
creating a new class of homeless persons - and unnecessarily drains
public assistance programs at the expense of tax payers. For better, the
law of bankruptcies should actively prevent creation a national third
world environment based on U.S. economic policy.
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