# 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:** 5
**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, 5:04pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/81 "2005-10-17T17:04:47Z")
> [@Dishfunctional](#): > > Uh, no and yes. > Or, they could self-insure. We’ve officially gotten way off track (due in large part to me), but you can’t self insure if you finance. Generally, one of the requirements for a mortgage is property insurance for the house itself – what is the point of having a secured obligation if the collateral is uninsured and can be destroyed. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 17, 2005, 5:19pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/82 "2005-10-17T17:19:16Z")
> [@whole bean](#): > > 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. It was about replacing items. Apology accepted. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 17, 2005, 5:21pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/83 "2005-10-17T17:21:53Z")
> [@Dishfunctional](#): > > Sorry… I’m in the Western US and your point escapes me. You wrote: “Oh, and the contents (purchased from the glittering shops along Rodeo Drive) are replaced, as well.” I wrote: “They must own nothing of consequence, like family photos and baby’s first shoes.” When lost, they cannot be replaced from the glittering shops along Rodeo Drive. (If this point had to be explained, then you are reading far too carelessly.) ---
**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, 5:24pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/84 "2005-10-17T17:24:22Z")
> [@Liberal](#): > > It was about replacing items. Apology accepted. After the tenth reading I got what you were after. :smack: ---
**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, 5:37pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/85 "2005-10-17T17:37:37Z")
> [@whole bean](#): > > 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”? No prob… I enjoy a sometimes heated exchange of opinion, as long as I’m learning something. That’s how this forum was “sold” to me - a place to express your opinion and arrive at new ones. So far, it has more than lived up to its billing. As for the repetitive redundancy, I understood what you meant and read right through it, sorta kinda. ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [October 17, 2005, 5:39pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/86 "2005-10-17T17:39:27Z")
> [@sleestak](#): > > 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. I came across pretty harsh there. I did not say people should not be responsible. I was trying to say that not all contingencies can be covered. There are workplace injuries, catastrophic illness, unexpected birthing problems, high cost of medication, all sorts of things that can go wrong, even if you do whatever you can to be prepared. Insurance companies will try to get out of paying. They will say something is not covered or is an “elective” if they can. I will try to come up with a better argument, but will have to do the necessary research and thought to give you a decent answer that goes beyond anecdotes and “gut feeling”. ---
**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, 5:45pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/87 "2005-10-17T17:45:21Z")
> [@whole bean](#): > > We’ve officially gotten way off track (due in large part to me), but you can’t self insure if you finance. Generally, one of the requirements for a mortgage is property insurance for the house itself – what is the point of having a secured obligation if the collateral is uninsured and can be destroyed. Once again, you’re right - we have drifted and I was a willing accomplice. I also would have to say, upon re-consideration, that my suggesting self-insurance for anyone who would build “on a known, active earthquake fault” was a bit Draconian. Insurance companies are, after all, in the business of insuring. ---
**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, 5:48pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/88 "2005-10-17T17:48:08Z")
I get the impression that folks like **sleesteak** would just as soon get rid of Chapter 7 entirely, is that correct? I wonder how much experience such folks have with those who seek protection under the Bankruptcy Code, the circumstance they are in, etc. Chapter 7 is not something most enter into lightly. Repeat filings of Chapter 13’s are were the abuse lies. It’s been my experience that in most cases, people who filed 13 would have been better off giving up the car and/or house and going into a 7. Existing law already prohibit sheltering assets in 7, now we have these means tests that throw folks into 13’s when there’s no reason for them to be there. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 17, 2005, 5:48pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/89 "2005-10-17T17:48:56Z")
> [@SteveG1](#): > > Insurance companies will try to get out of paying. They will say something is not covered or is an “elective” if they can. You’re to be commended for acknowledging the emotional nature of the topic. We’ve all been touched in some way by unforseen tragedy. But I think that it is important for people to understand that law, property constructed, will prohibit insurance companies (and anyone else) from breaching a contract, abrogating an agreement, or misrepresenting a policy. But if it goes beyond that, it will make the market artificial, and those who suffer least will be those who contribute most to the campaigns of the lawmakers. Meanwhile, I hope that anyone who experiences a genuine problem with claim denial, will find this page and the pages it links to helpful: [http://info.insure.com/health/claimdenial.html](http://info.insure.com/health/claimdenial.html) ---
**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, 5:55pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/90 "2005-10-17T17:55:29Z")
> [@Liberal](#): > > You wrote: > > “Oh, and the contents (purchased from the glittering shops along Rodeo Drive) are replaced, as well.” > > I wrote: > > “They must own nothing of consequence, like family photos and baby’s first shoes.” > > When lost, they cannot be replaced from the glittering shops along Rodeo Drive. (If this point had to be explained, then you are reading far too carelessly.) Now I see your point, and I may indeed have given up trying to figure it out too quickly. It’s earlier here, you know, and still rather murky. Weak excuses aside, I was not minimizing legitimate loss, only emphasizing what I felt was the disproportionate spread between what is paid in premiums and actual replacement costs. As you may have read above, I’ve since modified my objection. ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [October 18, 2005, 12:18am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/91 "2005-10-18T00:18:37Z")
> [@Liberal](#): > > You’re to be commended for acknowledging the emotional nature of the topic. We’ve all been touched in some way by unforseen tragedy. But I think that it is important for people to understand that law, property constructed, will prohibit insurance companies (and anyone else) from breaching a contract, abrogating an agreement, or misrepresenting a policy. But if it goes beyond that, it will make the market artificial, and those who suffer least will be those who contribute most to the campaigns of the lawmakers. Meanwhile, I hope that anyone who experiences a genuine problem with claim denial, will find this page and the pages it links to helpful: > > [http://info.insure.com/health/claimdenial.html](http://info.insure.com/health/claimdenial.html) It is emotional. Maybe for me, the main reason was that I at one time had to file, thanks to a clerical screw-up (to put it diplomatically). Here I was, I had moved lock stock and barrel, and had a written “guarantee” that I would be reimbursed promptly. To borrow a phrase, they lied. So, I filed bankruptcy since there was no way to pay the fees, interest, set up house in anew city, etc etc etc. This was me, with a decent job and a decent income, and with no previous debts at all. So I tend to be more sympathetic to anyone in the same boat. However, my attitude changes if it is someone who spends like a maniac and uses bankruptcy to get over. That’s a whole 'nother story. I did bookmark the link you gave us, just in case though 😉 ---
**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 19, 2005, 5:59am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/92 "2005-10-19T05:59:42Z")
> [@xtisme](#): > > What I said I said in the context of the OP spouting off about Ayn Rand and Capitalisim…in the context of Federal legislation of all things. As you are well aware of, this is a FEDERAL law, legislated by the GOVERNMENT. In that context it has jack shit to do with Ayn Rand OR Capitalism…right? Wrong. Unbridled Capitalism is the reason for a true GOVERNMENT (not a puppet of lobbyists) to step in and “legislate” to protect the public from criminal corporations and scam artists such as the capitalist WorldCons. Are you blind, **XT** , unable to see the lines of bankruptcy applicants directly affected by the capitalist financial institutions that woo the people at 7% interest rate , and then turn around and stick them with 35% interest rate and $75 penalty for late payment? And if you haven’t yet read Ayn Rand’s “Capitalism – The Unknown Ideal”, then I suggest you first [spend $8.09 here](http://www.amazon.com/exec/obidos/tg/detail/-/0451147952/002-3004695-1403215?v=glance) and read it, then take the book and your jack shit snobbish comments, and pack them firmly up your ass. In response to your spouting-off bullshit, “a federal law, legislated by the government”, such as enforcing anti-trust laws, is necessary to protect the public against crimes such as usury by a bunch of loan sharks dressed-up as respectable banks and financial institutions, exploiting the poor and the sick under the name of “free market capitalism”. You said that you sleep better grinding the poor and the disabled into dirt before laying down. Go ahead, **XT** , make my day. By admitting that, you just proved that a “True Capitalist” is nothing but a selfish bastard – a follower of Randist philosophy. > [@xtisme](#): > > To summarize the summary: We are talking about a law that dicks with the free market by modifying an earlier law dicking with the free market from the Federal level, something Rand would be opposed too in the first place (i.e. why drag her into this discussion at all?), and something that actually has nothing to do with pure Capitalism (i.e. again, why drag this in?) but instead has to do with the government. The OP and his/her rant seems completely disconnected (to me) from the cite…i.e. the OP is just looking to bash on Capitalism and what he perceives as Randians on this board (something I haven’t seen of ANY of the more libertarian types on this board) and just latched onto the cite and decided that though its the Federal Government doing this that somehow its the fault of Capitalism and The Market (and even more incomprehensibly, Ayn Rand and/or her philosophy). Thus the explosion of my irony meter. FYI, a true Government has two basic instruments available to tame capitalism: the power to raise revenues for social purposes and the power to regulate. In civilized countries, these have served to temper, stabilize, and even energize capitalism. What you fail to realize XT, is that Laisser Faire capitalism, as you’d like to promote, is a fucking pipe dream. It has never worked, and it will never work. Alan Greenspan, a life-long proponent of Laisser Faire capitalism, has even admitted that this system is not possible. It and communism goes against human nature. Laisser Faire capitalism is incapable of regulating itself. Enron, WorldCom, Adelphia, Arthur Anderson and the S&L bailout are recent and classic examples of how self-regulating capitalism has failed. The deregulation of the energy industry in California is another example of how self-regulating capitalism has failed. And now we have the corrupt capitalist Citi Bank, lobbying/using the corrupt US government to pass stupid laws that cause the people line up to declare bankruptcy. So, **XT** , WTF irony are you talking about? Your narrow-minded tunnel vision is exploding my tolerance meter of ignorance. No wonder this message board has been fighting against it since 1973. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [October 19, 2005, 10:14am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/93 "2005-10-19T10:14:47Z")
Everyone knows that a true Government is one that does not put sugar on its porridge. “Laissez faire does not mean: Let soulless mechanical forces operate. It means: Let each individual choose how he wants to cooperate in the social division of labor; let the consumers determine what the entrepreneurs should produce. Planning means: Let the government alone choose and enforce its rulings by the apparatus of coercion and compulsion… Laissez faire means: Let the common man choose and act; do not force him to yield to a dictator.” Ludwig von Mises, _Human Action_, pp. 731-732 ---
**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 19, 2005, 11:55am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/94 "2005-10-19T11:55:39Z")
> [@Liberal](#): > > Everyone knows that a true Government is one that does not put sugar on its porridge. > > “Laissez faire does not mean: Let soulless mechanical forces operate. It means: Let each individual choose how he wants to cooperate in the social division of labor; let the consumers determine what the entrepreneurs should produce. Planning means: Let the government alone choose and enforce its rulings by the apparatus of coercion and compulsion… Laissez faire means: Let the common man choose and act; do not force him to yield to a dictator.” Yeah. And let each individual Hamburger Flipper (constituting a lot of US employment figures) know by themselves how to invest “their savings” in stocks, bonds and mutual funds, without needing Merrill Lynch to “help them” under privatization of Social Security – making sure they have “severance pay parachutes” upon promotion to retirement. As Barbara Bush said to Louisiana people: Let them eat cake!! ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 19, 2005, 12:31pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/95 "2005-10-19T12:31:49Z")
> [@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. I think we all may have been misunderstanding what “credit counseling” is. After watching a piece on the New Hour about this legislation, I think what it means is having a proffessional look at whether or not your debt can be restructured and if a payment schedule can be worked out with your creditors. I don’t think it means going to classes about how better to handle your finances. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 19, 2005, 12:37pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/96 "2005-10-19T12:37:55Z")
**Wakeup Call** : Can you calm down for a minute or two and post something coherent on this subject? I can’t figure out what your point is. You seem to be suggesting that bankruptcy laws have either been eliminated (they haven’t) or newly created (that isn’t true either). The law has changed. Tell us specifically what is wrong about the new rules, and why the old ones are better. The lines that you are ranting about are just people who want to file under the old rules. This happens all the time when laws change. Are we to infer that change is bad? Any change? ---
**Author:** ![Dewey\_Cheatem\_Undhow](https://avatars.discourse-cdn.com/v4/letter/d/13edae/32.png) [@Dewey\_Cheatem\_Undhow](https://boards.straightdope.com/u/Dewey_Cheatem_Undhow)\ **Post date:** [October 19, 2005, 2:21pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/97 "2005-10-19T14:21:42Z")
> [@Liberal](#): > > These are new regulations and new laws that add paperwork and expense to the process of declaring bankruptcy. In other words, the market is now _less_ free than it was. You should be ecstatic. Waitamininute. I would have thought that bankruptcy law would be anathema to one holding your world view. After all, bankruptcy law allows a debtor to avoid paying the full amount of his obligations to his creditors. Isn’t that an “initiation of force” against the creditor? I would have thought this new law, which makes bankruptcy filings more difficult, would have been right up your alley, since it makes it more difficult to use the law to avoid one’s contractual obligations. I guess what I’m asking is this: in a libertarian society such as the one you espouse (absence of government in the traditional sense, replaced by freely-contracted-for services) is there an equivelant to bankruptcy? If so, how so? ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [October 19, 2005, 3:20pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/98 "2005-10-19T15:20:33Z")
> [@Wake up call](#): > > Enron, WorldCom, Adelphia, Arthur Anderson and the S&L bailout are recent and classic examples of how self-regulating capitalism has failed. The deregulation of the energy industry in California is another example of how self-regulating capitalism has failed. And now we have the corrupt capitalist Citi Bank, lobbying/using the corrupt US government to pass stupid laws that cause the people line up to declare bankruptcy. In the interest of promoting a true free market, let’s STOP bailing out companies. Let’s tell them that they can sink or swim, just like consumers now will have to. No bailouts, bankruptcies or “reorganizational bankruptcies” for banks, lenders, airlines, or any other businesses. They can get the same deal as the little guys. Tit for tat.They can send their CEO’s to credit counsellling and then pay off their debts. Anything less would be just as wrong as giving Joe Average a way out. People tend to say (about others) well you chose to live someplace where “weather happens” so you should just suck it up. Or they say well you chose to blah blah blah and if it goes wrong just suck it up. Using the same argument, if a bank or credit card company extends credit or loans to people who can’t or won’t pay back, they can just suck it up and take the losses to. Nobody forced them to make the loan. As for California, I was here for the rate hikes and “rolling blackouts”. It was bullshit. It was phony and it was a rip-off. We have a ballot up now (ballot 80) which some people call the “stop ENRON” ballot. It will bring back state regulation. I plan to vote for it, given the way we were all treated during the de-regulation era. Self regulation does not work. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 19, 2005, 3:28pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/99 "2005-10-19T15:28:24Z")
> [@SteveG1](#): > > In the interest of promoting a true free market, let’s STOP bailing out companies. Let’s tell them that they can sink or swim, just like consumers now will have to. No bailouts, bankruptcies or “reorganizational bankruptcies” for banks, lenders, airlines, or any other businesses. They can get the same deal as the little guys. Tit for tat.They can send their CEO’s to credit counsellling and then pay off their debts. Anything less would be just as wrong as giving Joe Average a way out. People tend to say (about others) well you chose to live someplace where “weather happens” so you should just suck it up. Or they say well you chose to blah blah blah and if it goes wrong just suck it up. Using the same argument, if a bank or credit card company extends credit or loans to people who can’t or won’t pay back, they can just suck it up and take the losses to. Nobody forced them to make the loan. One more time… These laws still allow bankruptcy. The rules are slightly different, but no one has to “sink or swim”. The biggest difference is that many people (those with higher incomes) will have to file Chapter 13 instead of Chapter 7. ---
**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 19, 2005, 3:46pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/100 "2005-10-19T15:46:35Z")
> [@John Mace](#): > > One more time… These laws still allow bankruptcy. The rules are slightly different, but no one has to “sink or swim”. The biggest difference is that many people (those with higher incomes) will have to file Chapter 13 instead of Chapter 7. Good point and I agree…still, I have to agree with SteveG1’s point: ‘In the interest of promoting a true free market, let’s STOP bailing out companies.’ Of course, the irony is that he probably thinks that its the free trader types who WANT the gubberment to bail out businesses and such. 😉 -XT [Previous page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=4) [Next page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=6)