# 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:** 4
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 3:16pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/61 "2005-10-17T15:16:09Z")
> [@Liberal](#): > > They must own nothing of consequence, like family photos and baby’s first shoes. not true, exemptions vaery from state to state. ---
**Author:** ![zamboniracer](https://avatars.discourse-cdn.com/v4/letter/z/e9a140/32.png) [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)\ **Post date:** [October 17, 2005, 3:19pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/62 "2005-10-17T15:19:13Z")
> [@Dishfunctional](#): > > I’m _not_ a lawyer, Zamboniracer, but what if this is a condition of the original loan application? I suspect that most of the original credit applications have in microscopic print “This agreement can be changed unilaterally at any time by the lender or its assignees.” ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 3:19pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/63 "2005-10-17T15:19:33Z")
> [@Liberal](#): > > They must own nothing of consequence, like family photos and baby’s first shoes. My bad, I thoguht you were talking about filing bankruptcy, it looks like your comment might have something to do with insurance claims. If so, accept my appologies. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 3:28pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/64 "2005-10-17T15:28:27Z")
> [@John Mace](#): > > I, too, think the counseling aspect is kind of strange… Strange, maybe, but isn’t it basically education, albeit, after the fact? Some might see this as “Big Business” doing the job that “Public Education” should have done in the first place. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 3:28pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/65 "2005-10-17T15:28:56Z")
> [@Dishfunctional](#): > > The papers and TV are full of real-life, everyday anecdotal stories of property loss due to natural catastrophe, but for every “poor me” story, there’s a “not-so-poor me” story like Loopydude’s neighbor. What bugs me most are those Lexus drivers (who refuse to downsize) and the owners of Maibu beachfront who, just because they can afford the premium, have their insurance companies re-build their multi-million dollar homes every few years. Oh, and the contents (purchased from the glittering shops along Rodeo Drive) are replaced, as well. > > My point, if it’s required to have one, is that their premiums, although high, don’t even come _close_ to covering these costs… the rest of us responsibly-insured types pick up that tab. you’re not suggesting that insurance companies are treating these high risk insureds more favorably, are you? My premiums wouldn’t come close to paying to replace my property, but then again I don’t bundle my premiums with a bunch of other folks and then loan the money or invest it, whatever. If I did, I would be a insurance company. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 3:30pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/66 "2005-10-17T15:30:36Z")
> [@Dishfunctional](#): > > Strange, maybe, but isn’t it basically education, albeit, after the fact? Some might see this as “Big Business” doing the job that “Public Education” should have done in the first place. as has been mentioned, these paid credit counselors are largely owned by financial insitutions. Here, let us get you into debt and then you pay us to show you how to avoid doing it in the future. Nice. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 3:46pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/67 "2005-10-17T15:46:30Z")
> [@Liberal](#): > > They must own nothing of consequence, like family photos and baby’s first shoes. Sorry… I’m in the Western US and your point escapes me. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 3:54pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/68 "2005-10-17T15:54:06Z")
> [@whole bean](#): > > I know no bankruptcy attorney, regardless of political stripe or area of practice, that thinks the law is good – most jokingly refer to it as a return to debtor’s prison. Now, why is that? Could it be that the new laws make their job more difficult? And if that’s the case, wouldn’t it be a natural reaction to characterize such laws in a negative way, regardless of their overall impact on the lending industry? I’m not an attorney, but it sure seems like they would react just like any other guy whose job all of a sudden becomes less of a slam-dunk. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 3:58pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/69 "2005-10-17T15:58:53Z")
> [@zamboniracer](#): > > I suspect that most of the original credit applications have in microscopic print “This agreement can be changed unilaterally at any time by the lender or its assignees.” OK, but I was asking about the credit counseling requirement. What if, as a condition of getting the loan, the applicant has to agree to credit counseling in the event of a default. Wouldn’t that sort of make the “forced contract” issue moot? ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 4:05pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/70 "2005-10-17T16:05:17Z")
> [@whole bean](#): > > as has been mentioned, these paid credit counselors are largely owned by financial insitutions. Here, let us get you into debt and then you pay us to show you how to avoid doing it in the future. Nice. preemptive reply – “owned” should have been “funded.” Although that will likely chnage. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 4:07pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/71 "2005-10-17T16:07:44Z")
> [@whole bean](#): > > as has been mentioned, these paid credit counselors are largely owned by financial insitutions. Here, let us get you into debt and then you pay us to show you how to avoid doing it in the future. Nice. preemptive reply – “owned” should have been “funded or owned.” ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 4:13pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/72 "2005-10-17T16:13:12Z")
> [@whole bean](#): > > you’re not suggesting that insurance companies are treating these high risk insureds more favorably, are you? My premiums wouldn’t come close to paying to replace my property, but then again I don’t bundle my premiums with a bunch of other folks and then loan the money or invest it, whatever. If I did, I would be a insurance company. Well, in a way, I suppose I am. It seems to me that the risk of insuring property in a location with a certainty of eventual destruction is not only high, but absolutely predictable. I’m no insurance expert, but it just seems to me that some properties do not or should not qualify for “insurance” by definition: One that will be destroyed, sooner rather than later. Now, if insuring those properties _anyway_, despite the certainty of loss, is “favorable treatment”, then so be it. What I’m certain of is that the insurance companies are still collecting (admittedly higher) premiums for these properties, which beats collecting no insurance premiums, and the rest of us have to make up the difference between what they have collected and what they must pay out when the claim is filed. I guess where I’m going with this is the old “personal responsibility” thing – if I build a house on a known, active earthquake fault, for instance, and sure enough an earthquake takes me out, I shouldn’t expect a “bundled” group of other folks to bail me out… and out… and out… ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 4:15pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/73 "2005-10-17T16:15:13Z")
> [@Dishfunctional](#): > > Now, why is that? Could it be that the new laws make their job more difficult? No, the new law hardly impacts my job at all. I no longer deal in run of the mill consumer bankruptcy. In the relatively rare instance that I represent an individual, it’s a $5,000 retainer just to get an audience. A new level of sophisitication is nothing we can’t deal with. The same goes for most of the bankruptcy attorneys I know. With the kind of work we do, we bill by the hour, so if something takes longer it costs more, and the cases we deal with aren’t going anywhere. I cited the opinions of other bankr. attorneys (albeit it anecdotal) to suggest that those who understand the law best think it foolish. I think you would find that were the bench to openly comment on it, their reactions would be the same. > [@Dishfunctional](#): > > And if that’s the case, wouldn’t it be a natural reaction to characterize such laws in a negative way, regardless of their overall impact on the lending industry? I’m not an attorney, but it sure seems like they would react just like any other guy whose job all of a sudden becomes less of a slam-dunk. It’s not the case. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 4:21pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/74 "2005-10-17T16:21:32Z")
> [@Dishfunctional](#): > > Well, in a way, I suppose I am. It seems to me that the risk of insuring property in a location with a certainty of eventual destruction is not only high, but absolutely predictable. I’m no insurance expert, but it just seems to me that some properties do not or should not qualify for “insurance” by definition: One that will be destroyed, sooner rather than later. > > Now, if insuring those properties _anyway_, despite the certainty of loss, is “favorable treatment”, then so be it. What I’m certain of is that the insurance companies are still collecting (admittedly higher) premiums for these properties, which beats collecting no insurance premiums, and the rest of us have to make up the difference between what they have collected and what they must pay out when the claim is filed. > > I guess where I’m going with this is the old “personal responsibility” thing – if I build a house on a known, active earthquake fault, for instance, and sure enough an earthquake takes me out, I shouldn’t expect a “bundled” group of other folks to bail me out… and out… and out… . . . unless you contracted with them (or with a third party with whom they also contracted) to do so. If you find the whole concept of dispersing liability repugnant, self insure. I fail to see what this has to do with personal responsibility – is it not responsible to insure? Besides, as I alluded earlier, it’s not like your premiums are sitting in bankers box down at the insurance company till disaster strikes. Insurance co’s have actuaries to evaluate risk, if you don’t like sharing in that risk – self insure – but you’ll probably kick yourself in the event you do suffer a loss. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 4:24pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/75 "2005-10-17T16:24:52Z")
> [@whole bean](#): > > as has been mentioned, these paid credit counselors are largely owned by financial insitutions. Here, let us get you into debt and then you pay us to show you how to avoid doing it in the future. Nice. You may have missed my point, or I may have failed to make it clearly in the rush to catch up to this thread. It’s sort of a side issue, but still an important one, I believe, that simple survival skills, when it comes to finance, could be taught in the schools well before a person has to face the real issues in the real world, one of which is the fact that lenders are in the business of lending, another of which is that money is their product, and the last of which is that they can and should advertise their product as effectively as any other business… until such time as it is made illegal. ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [October 17, 2005, 4:26pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/76 "2005-10-17T16:26:10Z")
> [@Dishfunctional](#): > > I don’t know… maybe get a better job? Unless by “locked” you mean that there’s chains and stuff, then the guy really does have problems! So, uh, do you think people are surrounded by great oppertunities to make untold thousands more than they already are and don’t take them out of sheer pigheadedness? Do you really think that making more money is a matter of walking out and getting a better job? > [@](#): > > I guess where I’m going with this is the old “personal responsibility” thing – if I build a house on a known, active earthquake fault, for instance, and sure enough an earthquake takes me out, I shouldn’t expect a “bundled” group of other folks to bail me out… and out… and out… If nobody built their houses on known, active earthquake faults, you’d have a lot of trouble finding stuff to buy with all this money you so easily aquire because there’d be nobody to work the Port of Oakland- one of the biggest Pacific ports. In fact, the nation would be thrown in to chaos as one of it’s largest economies took up mass-relocation. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 4:29pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/77 "2005-10-17T16:29:31Z")
> [@whole bean](#): > > No, the new law hardly impacts my job at all. I no longer deal in run of the mill consumer bankruptcy. In the relatively rare instance that I represent an individual, it’s a $5,000 retainer just to get an audience. A new level of sophisitication is nothing we can’t deal with. The same goes for most of the bankruptcy attorneys I know. With the kind of work we do, we bill by the hour, so if something takes longer it costs more, and the cases we deal with aren’t going anywhere. I cited the opinions of other bankr. attorneys (albeit it anecdotal) to suggest that those who understand the law best think it foolish. I think you would find that were the bench to openly comment on it, their reactions would be the same. > > It’s not the case. Thank you. Being neither an attorney nor one those who understand the law best, I was genuinely curious and didn’t intend to come off as presumptuous. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [October 17, 2005, 4:46pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/78 "2005-10-17T16:46:29Z")
> [@Dishfunctional](#): > > Thank you. Being neither an attorney nor one those who understand the law best, I was genuinely curious and didn’t intend to come off as presumptuous. Sorry to be defensive. Clearly, I don’t speak for everyone. Also, there are a lot of good changes in the new law, but they are relatively minor compared to the scope of the “bad” overhaul. In rereading the post you replied to, I caught that I wrote “albeit it,” can that be the new highbrow version of “gotcha ya”? ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 4:54pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/79 "2005-10-17T16:54:28Z")
> [@whole bean](#): > > . . . unless you contracted with them (or with a third party with whom they also contracted) to do so. If you find the whole concept of dispersing liability repugnant, self insure. I fail to see what this has to do with personal responsibility – is it not responsible to insure? Besides, as I alluded earlier, it’s not like your premiums are sitting in bankers box down at the insurance company till disaster strikes. Insurance co’s have actuaries to evaluate risk, if you don’t like sharing in that risk – self insure – but you’ll probably kick yourself in the event you do suffer a loss. I do see your point(s), and I do self-insure… now. I suppose my attitudes are formed by having lost more than one home and a business as a result of natural disasters (earthquake / wildfire), and having had to make the decision whether or not to re-build in the same locations, knowing the likelihood of the same thing happening again. It was a very difficult decision, as the locations were desirable for all the right reasons. I decided to relocate to an area less prone to such events, and one of the factors in the prevailing view was the “fairness” angle – Is it “right” to do this, to stay and re-build, knowing that great cost will be involved to make me well, and that others will have to pay most of it? Complicating the matter was the fact that the events took place in California, where the availability of certain types of catastrophic coverage and their rates are mandated and provided by the state, and a large portion of the claims are ultimately paid for by the taxpayer. Sure, I miss the ski slope views and the sunset glistening off the lake, but I feel I’ve only now made the truly “responsible” decision. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 17, 2005, 4:59pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/80 "2005-10-17T16:59:32Z")
> [@even sven](#): > > So, uh, do you think people are surrounded by great oppertunities to make untold thousands more than they already are and don’t take them out of sheer pigheadedness? Do you really think that making more money is a matter of walking out and getting a better job? Uh, no and yes. > [@even sven](#): > > If nobody built their houses on known, active earthquake faults, you’d have a lot of trouble finding stuff to buy with all this money you so easily aquire because there’d be nobody to work the Port of Oakland- one of the biggest Pacific ports. In fact, the nation would be thrown in to chaos as one of it’s largest economies took up mass-relocation. Or, they could self-insure. [Previous page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=3) [Next page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=5)