# The Bankruptcy lines. The Revenge of the Capitalists? **URL:** \ **Category:** Great Debates\ **Created:** [October 15, 2005, 9:04am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343 "2005-10-15T09:04:10Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 15, 2005, 6:13pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/21 "2005-10-15T18:13:38Z")
> [@zamboniracer](#): > > Under the new act if a debtor wants to file bankruptcy he has to first enter into an agreement with a “credit counseler”, which doesn’t strike me as Constitutional. A very interesting observation! Maybe it will get tested with the new Supremes. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 15, 2005, 6:48pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/22 "2005-10-15T18:48:15Z")
I have no idea, but even in my ignorance, I’d be pretty close to betting **John’s** childrens shoes that there is no clear definition, nationwide, on what actually constitutes a _bona fide_ “credit counselor”. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [October 15, 2005, 6:57pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/23 "2005-10-15T18:57:11Z")
> [@zamboniracer](#): > > I am a lawyer, but not a neither a bankruptcy lawyer nor a Constitutional scholar, but it sure seems to me that the bankruptcy act’s “Full employment for credit counseler provisions” violate the Constitutional requirement forbidding impairment of contracts. The freedom to enter into a contract includes the freedom NOT to enter into a contract. Under the new act if a debtor wants to file bankruptcy he has to first enter into an agreement with a “credit counseler”, which doesn’t strike me as Constitutional. I missed that part of the Constitution. Could you refresh my recollection? ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 15, 2005, 7:12pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/24 "2005-10-15T19:12:18Z")
> [@Bricker](#): > > I missed that part of the Constitution. Could you refresh my recollection? Article I, Section 10, 1st clause: “No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.” [This site](http://ago.nol.org/local/opinion/?topic=details&id=1980) says: “In determining whether a particular statute gives rise to a contractual obligation subject to constitutional impairment, it is of first importance to examine the language of the statute. Absent an adequate expression of actual intent to create a contract, that which is undoubtedly a scheme of public regulation will not lightly be construed to be, in addition, a private contract to which the state is a party. Although it may be taken as a general rule that rights conferred by statutes or ordinances are presumed not to be contractual in their nature so as to prevent their alteration or abrogation, this presumption can be overcome if language in the statute and other indicia show that the legislature intended to bind itself contractually. A legislative enactment in the ordinary form of a statute may contain provisions which, when accepted as the basis of action by individuals or corporations, become contracts between them and the state within the protection of the clause of the Federal Constitution forbidding the impairment of contractual obligations; rights may accrue under a statute, or even be conferred by it, of such character as to be regarded as contractual, and such rights cannot be defeated by subsequent legislation or inadequate funding by the state.” ---
**Author:** ![Wake\_up\_call](https://avatars.discourse-cdn.com/v4/letter/w/dec6dc/32.png) [@Wake\_up\_call](https://boards.straightdope.com/u/Wake_up_call)\ **Post date:** [October 15, 2005, 7:41pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/25 "2005-10-15T19:41:39Z")
> [@Left Hand of Dorkness](#): > > I wonder if you could give me a bit of context, **Wake Up Call** : do you consider yourself a Democrat? [It’s come up in this thread](http://boards.straightdope.com/sdmb/showpost.php?p=6688659&postcount=170). Within the box, where my choice is limited to be either a Republican or a Democrat, I choose Democrats for the time being. But, that is akin to the French proverb: “In the land of the blinds, the deaf is the king”. Even though there are dozens of so-called political parties in the US, it is unfortunate that we are stuck with these 2 out-of-touch choices, in terms of the final outcome. Out of the box, however, there are possibilities of taking 10% of “the good things” from the Republicans, 20% of “the good things” from the Democrats, and add 70% “new good things” that all add up to diminishing the US misery index compared to countries such as Switzerland, Canada, Australia, Netherlands, Denmark, etc. **Liberal** , of course, is correct in saying that the US is not France. He is also entitled to his opinion calling me a hypocrite and a hysteric. But to answer your question, I believe from where we are, our path needs to first go through a Democratic majority, so that we can eventually evolve and outgrow them, and develop a viable 3rd or 4th political parties in this country, leaving the Republicans way behind with something like 15% of the votes. But that is IMHO. Go ahead and call it naive, unrealistic and utopian. ---
**Author:** ![I\_Love\_Me\_Vol.I](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/i_love_me_vol.i/32/521_2.png) [@I\_Love\_Me\_Vol.I](https://boards.straightdope.com/u/I_Love_Me_Vol.I)\ **Post date:** [October 15, 2005, 7:50pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/26 "2005-10-15T19:50:51Z")
It seems that there is a sizable group of people in this country that declare bankruptcy because of insurmountable medical debt. Don’t these bankruptcies end up costing \*all \* of us (in various ways, but especially higher health insurance premiums) a lot of money? Would it maybe be less expensive to have decent health care insurance provided to everyone at a rate that each individual can afford so that hospitals and insurance companies don’t have to suck up the costs of these bankruptcies (that they dutifully pass along to all of us)? I’ve even heard tell that this sort of arangement would encourage more preventitive health care which would save more money than it costs to pay for serious medical procedures that could have be prevented. This is one of the reasons why I would think that more people would support a national health insurance. It seems it would cost the average taxpayer _less_ money not _more_. [SIZE=2](oh i guess I see the problem. it would cost the average taxpayer and all taxpayers as a whole less money, but it would probably cost the rich tax payers a bit more.)[/SIZE] ---
**Author:** ![sleestak](https://avatars.discourse-cdn.com/v4/letter/s/919ad9/32.png) [@sleestak](https://boards.straightdope.com/u/sleestak)\ **Post date:** [October 15, 2005, 8:41pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/27 "2005-10-15T20:41:39Z")
[QUOTE=Knorf] Someone, for instance, who cannot afford medical insurance, receives no medical benefits from his job, and buys things such as emergency medical care, _for his daughter_? (I have a friend in this exact situation.) I suppose from your point of view, the guy is just screwed, and his daughter with him. Why should people of means look out for the working class, anyway? Let 'em all rot. [QUOTE] And if you read my post you will notice that I did say medical exspenses are different. Bad things happen to good people. The insurance issue is complex and I don’t know how to fix it. A the same time, when someone has a child it is their responsibility to take care of that child. That includes buying insurance. If the parent cannot afford insurance then they need to do something, like getting an education and getting a better job, so that they can afford it. The fact that someone gets themselves into a bad situation (having a child with no insurance) shouldn’t and doesn’t absolve them of the responsibility for that situation. Your friend, and his daughter, are certainly screwed. But it wasn’t an evil corporation nor the government who did the screwing. It was your friend who had a child that he couldn’t provide insurance for. I hope everything works out for your friend and especially his daughter, since she had no choice in the matter. Slee ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [October 15, 2005, 9:01pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/28 "2005-10-15T21:01:35Z")
That sounds like a cop out. I’m sorry, Plenty of people pay for insurance, only to find that when they need it, “We’re sorry but that isn’t covered”, or “Your policy has been cancelled” - which really means “we won’t carry insurance for anyone who may actually need it”. Or, they can’t afford the deductable. Or they have gotten laid off and their company plan was discontinued. Or the company simply decided to use insurance as a “give back” in their fights with the union. Or the owner just cancelled it so he could use the money to buy his yacht. Or whatever. Yeah the insurance situation is complex. It’s that way on purpose, so you don’t ever know what you are entitled to. “If the parent cannot afford insurance then they need to do something, like getting an education and getting a better job, so that they can afford it.” That is a cop out too. How does someone locked in a shitty job find the time and money to work, raise a family and get a fancy degree? Ain’t gonna happen. Guess we may as well just bring back the work houses and debtors prisons. Or are you saying only the wealthy should be allowed to have families? I’m asking as someone relatively well off who is genuinely curious. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 15, 2005, 9:25pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/29 "2005-10-15T21:25:56Z")
I don’t believe that an insurance company is allowed to cancel a policy in good standing; i.e., a policy that is paid up. Buy you’re right about the complexity, for which a good deal of the blame belongs squarely on mountains of regulatory interference. ---
**Author:** ![bdgr](https://avatars.discourse-cdn.com/v4/letter/b/a87d85/32.png) [@bdgr](https://boards.straightdope.com/u/bdgr)\ **Post date:** [October 15, 2005, 10:11pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/30 "2005-10-15T22:11:05Z")
> [@Liberal](#): > > I don’t believe that an insurance company is allowed to cancel a policy in good standing; i.e., a policy that is paid up. Buy you’re right about the complexity, for which a good deal of the blame belongs squarely on mountains of regulatory interference. Or rather on the lack of regulatory interference. The companies themselves create the complexity to avoid paying claims. They are allowed to because they are not properly regulated. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 15, 2005, 11:23pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/31 "2005-10-15T23:23:32Z")
> [@bdgr](#): > > Or rather on the lack of regulatory interference. The companies themselves create the complexity to avoid paying claims. They are allowed to because they are not properly regulated. Insurance companies are regulated fifty-one different ways. Literally. It takes insurance companies as much as eighteen times longer than banks and securities firms to launch new products because the latter can bypass state regulations, which are extremely complicated and often contradictory. That sort of legal complexity attracts packs of lawyers that target insurance companies as cash cows. As a general rule, only 14% of claims are denied, and of those nearly half are reinstated. Every state mandates some sort of appeals process for claim denials. ---
**Author:** ![Knorf](https://avatars.discourse-cdn.com/v4/letter/k/58956e/32.png) [@Knorf](https://boards.straightdope.com/u/Knorf)\ **Post date:** [October 15, 2005, 11:37pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/32 "2005-10-15T23:37:27Z")
> [@John Mace](#): > > Granted, this bill is a great deal for the credit industry, but I don’t think most of the people bitching in this thread really understand what the bill does. I’ll take it upon myself to understand it better before I do anymore bitching. ---
**Author:** ![bdgr](https://avatars.discourse-cdn.com/v4/letter/b/a87d85/32.png) [@bdgr](https://boards.straightdope.com/u/bdgr)\ **Post date:** [October 16, 2005, 2:25am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/33 "2005-10-16T02:25:26Z")
> [@Liberal](#): > > Insurance companies are regulated fifty-one different ways. Literally. It takes insurance companies as much as eighteen times longer than banks and securities firms to launch new products because the latter can bypass state regulations, which are extremely complicated and often contradictory. That sort of legal complexity attracts packs of lawyers that target insurance companies as cash cows. As a general rule, only 14% of claims are denied, and of those nearly half are reinstated. Every state mandates some sort of appeals process for claim denials. I used to work in an insurance company. I used to listen to management laugh about new ways they had found to screw people out their benifits and I’ve dealt with companies on the other end where you pratically had to hire a lawyer to get them to pay the claim they owed you. You shouldnt have your credit ruined, go through an appeals process, and hire a lawyer to get what you pay for from these jerks. I’ve been there. I had it in writing that my back surgery was approved before I had it and then spent months fielding letters and phone calls from collections because the insurance company refused to pay (Yes, I did complain to the state). Insurance companys need to be stepped on more, not less. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [October 16, 2005, 2:49am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/34 "2005-10-16T02:49:03Z")
Well, there’s regulation and then there’s regulation. GeeDubyaCo has a definite philosophical preference for the sort of regulation practiced by a brood sow in relation to her piglets, ensuring that they grow big and strong. I’d prefer a regulatory perspective more in keeping with thier status as bacon futures. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [October 16, 2005, 4:38am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/35 "2005-10-16T04:38:33Z")
> [@Liberal](#): > > Article I, Section 10, 1st clause: > > “No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.” > > [This site](http://ago.nol.org/local/opinion/?topic=details&id=1980) says: > > “In determining whether a particular statute gives rise to a contractual obligation subject to constitutional impairment, it is of first importance to examine the language of the statute. Absent an adequate expression of actual intent to create a contract, that which is undoubtedly a scheme of public regulation will not lightly be construed to be, in addition, a private contract to which the state is a party. Although it may be taken as a general rule that rights conferred by statutes or ordinances are presumed not to be contractual in their nature so as to prevent their alteration or abrogation, this presumption can be overcome if language in the statute and other indicia show that the legislature intended to bind itself contractually. A legislative enactment in the ordinary form of a statute may contain provisions which, when accepted as the basis of action by individuals or corporations, become contracts between them and the state within the protection of the clause of the Federal Constitution forbidding the impairment of contractual obligations; rights may accrue under a statute, or even be conferred by it, of such character as to be regarded as contractual, and such rights cannot be defeated by subsequent legislation or inadequate funding by the state.” Uh huh. Well, so far as I’m aware, the meaning of “impair” in this clause was defined by _Home Building & Loan Assn. v. Blaisdell_: > [@](#): > > The obligation of a contract is the law which binds the parties to perform their agreement. …This Court has said that **the laws which subsist at the time and place of the making of a contract, and where it is to be performed, enter into and form a part of it, as if they were expressly referred to or incorporated in its terms**. This principle embraces alike those which affect its validity, construction, discharge, and enforcement. … Nothing can be more material to the obligation than the means of enforcement… > > The obligations of a contract are impaired by a law which renders them invalid, or releases or extinguishes them… But this broad language cannot be taken without qualification. Chief Justice Marshall pointed out the distinction between obligation and remedy. Sturges v. Crowninshield, supra, 4 Wheat. 200. Said he: The distinction between the obligation of a contract, and the remedy given by the legislature to enforce that obligation, has been taken at the bar, and exists in the nature of things. Without impairing the obligation of the contract, the remedy may certainly be modified as the wisdom of the nation shall direct… Is there any case law that has the remotest support for the idea that “The freedom to enter into a contract includes the freedom NOT to enter into a contract” is implicated by Article 1, Section 10? That section refers to the inability of the state to _invalidate_ contracts… it has nothing to do with the proposition **zamboniracer** offered. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [October 16, 2005, 5:18am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/36 "2005-10-16T05:18:03Z")
Oh, and here I thought it was going to be one of those B movies…Revenge of the Capitalists! 😛 So, if I have it right, people are bitching about Capitalism (and dragging in Rand to boot) because of some legislation thats being passed. Is that it? Because if so my irony meter has just gone off the scale! :smack: -XT ---
**Author:** ![Wake\_up\_call](https://avatars.discourse-cdn.com/v4/letter/w/dec6dc/32.png) [@Wake\_up\_call](https://boards.straightdope.com/u/Wake_up_call)\ **Post date:** [October 16, 2005, 6:36am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/37 "2005-10-16T06:36:32Z")
> [@xtisme](#): > > Is that it? Because if so my irony meter has just gone off the scale! If you want to debate, **XT** , let’s take a look at the top 3 ironies that has tipped off your scale. ---
**Author:** ![sleestak](https://avatars.discourse-cdn.com/v4/letter/s/919ad9/32.png) [@sleestak](https://boards.straightdope.com/u/sleestak)\ **Post date:** [October 16, 2005, 8:01am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/38 "2005-10-16T08:01:36Z")
> [@SteveG1](#): > > That sounds like a cop out. I’m sorry, Plenty of people pay for insurance, only to find that when they need it, “We’re sorry but that isn’t covered”, or “Your policy has been cancelled” - which really means “we won’t carry insurance for anyone who may actually need it”. Or, they can’t afford the deductable. Or they have gotten laid off and their company plan was discontinued. Or the company simply decided to use insurance as a “give back” in their fights with the union. Or the owner just cancelled it so he could use the money to buy his yacht. Or whatever. Yeah the insurance situation is complex. It’s that way on purpose, so you don’t ever know what you are entitled to. > > “If the parent cannot afford insurance then they need to do something, like getting an education and getting a better job, so that they can afford it.” That is a cop out too. How does someone locked in a shitty job find the time and money to work, raise a family and get a fancy degree? Ain’t gonna happen. Guess we may as well just bring back the work houses and debtors prisons. Or are you saying only the wealthy should be allowed to have families? I’m asking as someone relatively well off who is genuinely curious. So, suggesting that someone should be sure they can take care of a child before having one is a cop out? Or the suggestion that once a person has a child they should do everything they can to ensure that they can take care of that child? That’s a cop out? And where did you get the idea that I said that only rich people should have chldren? You don’t have to be rich to be able to afford the basics for a child. Amazingly many non-rich people take care of their children everyday. What I am saying is that if you are going to bring a child into the world you should make sure you can take care of that child. And guess what? People who _ARE NOT_ rich manage to do this all the time. My parents did it. My grandparents did it. My sister did it. In fact my sister put herself through school while married to an alcoholic who did not support her efforts and managed to get a degree so that she could dump her husband\* and raise her kids in a decent mannor. She worked, raised three kids, went to school and paid for it herself along with half the household bills. She is not alone. Many people do this. Now, ARE YOU suggesting that since some insurance companies suck and don’t cover all cases that it is proper to have children and not worry about insurance? Or are you suggesting that it is too hard for a parent to go to school and get a degree so that they can afford to care for their children? Slee \*My sisters husband was a fine man when they married. He later became an alcoholic, after the three kids. My sister had a HS diploma. She was going to be a stay at home Mom. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [October 16, 2005, 3:07pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/39 "2005-10-16T15:07:32Z")
> [@xtisme](#): > > Oh, and here I thought it was going to be one of those B movies…Revenge of the Capitalists! 😛 > > So, if I have it right, people are bitching about Capitalism (and dragging in Rand to boot) because of some legislation thats being passed. Is that it? Because if so my irony meter has just gone off the scale! :smack: > > -XT Don’t be obtuse. Bankruptcy exists as a buffer against the harsher effects of unbridled capitalism. The new legislation weakens that buffer. ---
**Author:** ![zamboniracer](https://avatars.discourse-cdn.com/v4/letter/z/e9a140/32.png) [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)\ **Post date:** [October 16, 2005, 7:57pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/40 "2005-10-16T19:57:14Z")
> [@Bricker](#): > > Uh huh. > > Well, so far as I’m aware, the meaning of “impair” in this clause was defined by _Home Building & Loan Assn. v. Blaisdell_: > Is there any case law that has the remotest support for the idea that “The freedom to enter into a contract includes the freedom NOT to enter into a contract” is implicated by Article 1, Section 10? That section refers to the inability of the state to _invalidate_ contracts… it has nothing to do with the proposition **zamboniracer** offered. Bricker, I bow to your superior legal analysis vis a vis the new bankruptcy statute’s impairment of contract. As I said above, I ain’t no expert. But the new statute’s manditory credit counseling requirement still stinks to high heaven. If it isn’t an impairment of contract, and I’ll concede that that is probably so, then it sounds in involuntary servitude and/or an impairment of the constitutional right to file bankruptcy. (Bankruptcy courts are mandated right on the face of the Constitution.) Constitututional rights can be limited by the police power, certainly, (as for example the right to petition for redress of grievences is limited by requiring protestors to get permits and stay in fenced off enclosures well away from the President when he’s out of his bunker) but favoring credit counselers over debtors sure isn’t an appropriate exercise of the police power, IMHO, YMMV. [Previous page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=1) [Next page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=3)