Wednesday, October 17, 2007

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005



The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 became official legislation on October 17, 2005. This Act was formed to make it more difficult for people to claim bankruptcy under Chapter 7 in which all debts are relinquished. Instead of making it so simple for people to file bankruptcy under Chapter 7, harsher requirements for claiming bankruptcy were issued such as: Increased attorney and liability costs, Mandatory credit counseling and debtor education, Increased attorney liability and costs and many other requirements. According to opensecrets.org the top lobbying spender of this bill was the Chamber of Commerce. The Chamber of Commerce is “the world’s largest business federation, representing over 3 million business of every size, sector and region”. Why would the Chamber of Commerce have such an interest in lobbying for the Bankruptcy Act?
The Chamber of Commerce helps to promote trade in its city, prevents unnecessary competition, and collects statistics that are beneficial to its members. So why would it be interested in the Bankruptcy Act? R. Bruce Josten Executive Vice President, Government Affairs of the U.S. Chamber of Commerce wrote a letter to the House Of Representatives that stated “bankruptcy reform will prevent wealthy debtors from using bankruptcy to wipe out the debts that they can afford to repay, and from passing those debts on to the millions of businesses and consumers who cannot afford to pay someone else’s bills.” How did this Bankruptcy Act help the Chamber of Commerce? One would assume that there is a reason that the Chamber of Commerce spent the most money on getting this act passed. As stated before, the Chamber helps to promote trade in its city. If someone files bankruptcy when they can actually afford to pay their bills, how can the Chamber promote, or even facilitate trade when others are left to pay for debts? Also, this would result in unnecessary competition because any extra money that businesses and consumers had would be spent on bills rather than furthering their business or personal wants and needs, thus their competition would have an unfair advantage.

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