« Changing Perspectives | Main | Consuming as a Sense of Control »

Congress Says Debtors' Thumbs May Be Amputated!

posted by John Pottow

Strictly speaking, this may not be true.  (The reason this may be so is because the statement is a complete lie of my own fabrication.)

Yet as we visit my parents where many old Canadians flee for the winter (Florida), I was struck by a radio adverstisement.  My dad has something called XM radio in his car, which I think is satellite, so I don't know if the adverstisers are local or national.  The ad was one of those super-hyped, manicly-overlapping succession of rapid rhetorical questions: "Trouble with credit?  Did you know you can consolidate your loans at a lower rate?" Etc., etc.

Here's the question that stuck out to me: "Did you know what new laws require you to pay back twice as much debt?"  (Or it may have been "Did you know new laws require you to pay back half of your debt?")

I wonder to readers who may have heard this or similar ads: Is this how credit consolidators and others are framing BAPCPA?  (In fairness, maybe it was some quirky state-specific law in Florida, or maybe I misheard, distracted by the challenge of driving with octogenarians.)  If this really is BAPCPA-puffing, then I think it is a strong illustration that perception may be more important than reality for new bankruptcy laws.  (Indeed, could ads like these literally be scaring people away from filing for bankruptcy?)  Worrisome, at least to me.


This is probably due to the Office of the Comptroller of the Currency raising the minimum credit card payment last winter. Most credit card companies doubled the minimum required payment. Overall, this is good for consumers, since it will lower interest payments and require credit card debt to be paid back sooner.


Client: "I heard that I am going to have to pay back all of my debts under the new law."
Lawyer: "Who told you that?"
Client: "My mother."
True email conversation - 10/17/2006

People are definitely being told by these 'consolidators' that BAPCPA will make them pay back all of their debts, that Ch 7 is basically unavailable unless you're poor, and that creditors will challenge their bankruptcies should they file.

I see people asking 'is this true' every day on several consumer credit boards I participate in. The amount of misinformation, from the lending industry and from other people in general is atrocious. These 'erase your credit card debt, get a home equity loan' ads are more prevalent than ever, and, of course, they don't tell you the ramifications of doing so and NOT changing your attitude towards credit or your spending habits.

The new one that gets me.. "get a home equity loan for your Christmas shopping" !

The comments to this entry are closed.


Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.



  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.