# 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:** 16\ **Page:** 6
**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, 3:57pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/101 "2005-10-19T15:57:00Z")
> [@xtisme](#): > > 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. Yep, and I almost put that in my post, too. Lots of people seem to think that being pro-free market means you want the government to be on the side of business, teaming up against the little guy. That’s not a free market, that’s crony capitalism. ---
**Author:** ![mazinger\_z](https://avatars.discourse-cdn.com/v4/letter/m/5f9b8f/32.png) [@mazinger\_z](https://boards.straightdope.com/u/mazinger_z)\ **Post date:** [October 19, 2005, 4:44pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/102 "2005-10-19T16:44:51Z")
> [@Wake up call](#): > > 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. Uh, if you want to rant about Capitalism, then open a real thread on the subject. Let me second **John Mace’s** comment about not knowing what it is the hell you are talking about. I was going to comment on other things (not on the OP, as I don’t have any interest in Bankruptcy or Ayn Rand for that matter (I didn’t like her style of writing and her tone was confusing as it relates to the invisible hand – I only read _Atlas Shrugged_ back in high school), but other posters have beat me to it. However, I would like to know what “Hamburger Flipper” is making ~$42,000/yr, the [average household income in 2002.](http://64.233.167.104/search?q=cache:igx48RT7T-AJ:www.census.gov/prod/2003pubs/p60-221.pdf+average+income+household+united+states&hl=en&client=firefox-a) If that was the case, I wouldn’t have wasted my parent’s money or my time with a college education, or taken out ~$70k+ in student loans to go to law school (scholarship my ass!) – then again, without the education, I wouldn’t have known that it was economically better for me to not go to school 😉 Unless, this is some professional “Hamburger Flipper” job that requires advanced degrees that I am unaware of. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [October 19, 2005, 5:10pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/103 "2005-10-19T17:10:37Z")
> [@John Mace](#): > > Yep, and I almost put that in my post, too. Lots of people seem to think that being pro-free market means you want the government to be on the side of business, teaming up against the little guy. That’s not a free market, that’s crony capitalism. Yes, and if you don’t actively regulate the “free” market, what you invariably get is a capitalist oligarchy, because people who do well under the free market INVARIABLY use their wealth to influence the government to make it possible, nay, easy, for them to remain wealthy, no matter the vagaries of the “free” market. So unless you actively support laws that strictly enforce a ban on such activities, free marketers are in fact fnas of capitalist oligarchy, or crony capitalism as it’s called. See: Halliburton. See: Enron. ---
**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, 5:16pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/104 "2005-10-19T17:16:43Z")
> [@Evil Captor](#): > > Yes, and if you don’t actively regulate the “free” market, what you invariably get is a capitalist oligarchy, because people who do well under the free market INVARIABLY use their wealth to influence the government to make it possible, nay, easy, for them to remain wealthy, no matter the vagaries of the “free” market. So unless you actively support laws that strictly enforce a ban on such activities, free marketers are in fact fnas of capitalist oligarchy, or crony capitalism as it’s called. See: Halliburton. See: Enron. Then actively support laws that stricty enforce a ban on such activities. note: neither of those two companies exist in a free market environment. ---
**Author:** ![tomndebb](https://avatars.discourse-cdn.com/v4/letter/t/b9e5f3/32.png) [@tomndebb](https://boards.straightdope.com/u/tomndebb)\ **Post date:** [October 19, 2005, 5:31pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/105 "2005-10-19T17:31:01Z")
> [@Wake up call](#): > > Are you blind, **XT** …? > … > then take the book and your jack shit snobbish comments, and pack them firmly up your ass. > > In response to your spouting-off bullshit, … > … > Your narrow-minded tunnel vision is exploding my tolerance meter of ignorance. **Wake up call** , you really need to tone it down. These comments do nothing to promote the discussion and your direct personal insults in the second quoted line are a direct violation of the rules of this Forum. Do not do this again. [/Moderator Mode] ---
**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 19, 2005, 5:45pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/106 "2005-10-19T17:45:35Z")
> [@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. How’s this? For all practical purposes, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) removes Chapter 7 as an option for the middle class? To be specific, the new law adds an objective test to 11 U.S.C. § 707(b), an abuse prevention mechanism in place since the reform act of 1979 (where the Act was replaced by the Code). Under the new law, abuse is presumed if: (i) in the six months prior to filing for protection, the average monthly income for the debtor’s household multiplied by 12 is greater than the median income for the state in which the debtor files; and (ii)(a)the debtor’s disposable income over five years is greater than $10,000, i.e. $166.67 per month; or, (b) if over a five year period, the debtor’s disposable income is between 6,000 and $10,000, i.e. $100 per month to $166.67 per month, so long as such disposable income would pay at least 25% of the debtor’s general unsecured debt (\>$24,000). In other words, if you live in a metropolis in a rural state, even a modest lower middle class income would exceed the state’s median income, so you have to comply with the “means test.” Therefore, if you have more than $166 a month left over after paying necessary expenses (as determined for your area by the IRS) and secured and priority (IRS, child support) debt, then that $166 plus goes to pay your unsecured creditors. No big deal you say? Well, sure if you’re fine with five years of no hic-ups, no unintended expenses and upwards of $3,000 in administrative costs to pay pro rata ten stinking grand in debt that in many cases is the result of a medical emergency. I can go into more detail with many doomsday scenarios. Suffice it to say, the bill is draconian. ---
**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, 5:52pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/107 "2005-10-19T17:52:12Z")
> [@Evil Captor](#): > > Yes, and if you don’t actively regulate the “free” market, what you invariably get is a capitalist oligarchy, because people who do well under the free market INVARIABLY use their wealth to influence the government to make it possible, nay, easy, for them to remain wealthy, no matter the vagaries of the “free” market. You are making an assumption here and then moving forward as if your assumption is fact. Fair enough…I actually agree with your assumption, though from a different angle. I guess your base assumption is that Government is corruptable (oh, I know you didn’t say this, but bottom line, this is what you are getting at)…probably a good assumption. If Government is corruptable then certainly folks will try and corrupt it. Ok, I buy that too. Obviously people who corrupt government are going to be those who have the means to corrupt it. So, the problem to me seems to be a corruptable government…not the free market per se. Since no one here is advocating NO government regulations (I’m certainly not despite Wake Up Calls rant at me) of the market, seems to me what you should be regulating isn’t the market but government and its corruptability. Its really not the thread for it, but if you want to talk about WHAT should be regulated (and what shouldn’t) then start a thread and keep an open mind. > [@Evil Captor](#): > > So unless you actively support laws that strictly enforce a ban on such activities, free marketers are in fact fnas of capitalist oligarchy, or crony capitalism as it’s called. See: Halliburton. See: Enron. No free market advocate is going to be a fan of crony capitalism or capitalist oligarchy…it distorts the market. Thats a bad thing. Both Halliburton and Enron are possible because of your vaunted government controls (and the manipulation of said controls), especially Halliburton who uses its power and influence against to secure GOVERMENT contracts and favors. You see, your government, as you already pointed out, is corruptable…and companies have the means of corrupting it. All your controls do is force them to find new and interesting ways around them…oh, and also distort the market while they are at it. -XT ---
**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, 7:43pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/108 "2005-10-19T19:43:40Z")
> [@Wake up call](#): > > 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. That mindset is astonishing for its sheer myopia. The burger flipper flips his burgers, clocks out, and goes home. But the franchise owner has invested his own equity into the business at the risk of losing it all. If the burger flipper flips a burger successfully, someone gets a decent hamburger. But if the owner runs his business successfully, several burger flippers, cashiers, waiters, cooks, supervisors and managers get paychecks. And those are just from him. The companies he buys his supplies from profit as well, and pay their employees. What the hell do you want, that the burger flipper get rewarded for risking nothing? ---
**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, 7:50pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/109 "2005-10-19T19:50:24Z")
> [@Dewey Cheatem Undhow](#): > > Waitamininute. Oh, dear God. > [@](#): > > 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 have taken, of late, to participating in discussions by taking as premises the presumptions of the OP. In other words, I am participating in discussing issues from a nontheoretical point of view. See, for example, the thread about the Democrats’ contract with America. > [@](#): > > 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. Uh huh. I have a long history of advocating piling new laws on top of old laws. The more the merrier, eh? > [@](#): > > 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? Don’t do that here. Don’t hijack this fellow’s thread so you can bellow at my philosophy. Don’t pretend to be stupid just to start a fight. Why don’t you take it to the Pit or something. Or open a new thread. Or maybe you could just paste your list. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 20, 2005, 6:11am UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/110 "2005-10-20T06:11:56Z")
> [@John Mace](#): > > 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. I see. That’s too bad… maybe it ought to be. I understand that one would rightly need professional guidance to get through the process, but it seems he could also use some remedial attention, like getting an alcoholic sober then requiring him to attend meetings. Probably a lousy analogy, but on the surface it seems to work. ---
**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 20, 2005, 6:45pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/111 "2005-10-20T18:45:10Z")
> [@Dishfunctional](#): > > I see. That’s too bad… maybe it ought to be. > > I understand that one would rightly need professional guidance to get through the process, but it seems he could also use some remedial attention, like getting an alcoholic sober then requiring him to attend meetings. > > Probably a lousy analogy, but on the surface it seems to work. there’s actually a “budget making/smart spending” type class debtors have to take to receive a discharge ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 20, 2005, 11:25pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/112 "2005-10-20T23:25:28Z")
> [@whole bean](#): > > there’s actually a “budget making/smart spending” type class debtors have to take to receive a discharge Thanks, **whole bean** , let’s hope we never have to attend. ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [October 21, 2005, 2:55pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/113 "2005-10-21T14:55:43Z")
> [@Dishfunctional](#): > > I see. That’s too bad… maybe it ought to be. > > I understand that one would rightly need professional guidance to get through the process, but it seems he could also use some remedial attention, like getting an alcoholic sober then requiring him to attend meetings. > > Probably a lousy analogy, but on the surface it seems to work. That may be a very GOOD analogy, in the case of compulsive spenders. I imagine some people do get a rush out of going on a massive shopping spree. Then, they crash when the bills start coming in. ---
**Author:** ![Dishfunctional](https://avatars.discourse-cdn.com/v4/letter/d/35a633/32.png) [@Dishfunctional](https://boards.straightdope.com/u/Dishfunctional)\ **Post date:** [October 21, 2005, 3:19pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/114 "2005-10-21T15:19:50Z")
> [@SteveG1](#): > > That may be a very GOOD analogy, in the case of compulsive spenders. I imagine some people do get a rush out of going on a massive shopping spree. Then, they crash when the bills start coming in. OK… and in place of Antabuse[sup]®[/sup], we could give them Monopoly money, or better yet, give them a fake credit card number and lock them in a room, empty except for a phone and a big screen TV tuned to The Shopping Network. > [@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. Couldn’t agree more. My earlier sentiments regarding weather-related and natural disaster “catastrophe recidivists” were misplaced - if they want to go through the hassle year after year, more power to them. Maybe businesses should be offered the option to purchase “Bankruptcy Insurance”… otherwise, SOL. Depending on the fine print, I might consider it, then try some _really_ risky stuff! ---
**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 21, 2005, 5:53pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/115 "2005-10-21T17:53:33Z")
> [@John Mace](#): > > 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. In a nutshell, the new bankruptcy law will make it more difficult for financially devastated families to get relief. Here are just 3 specifics. There is a lot more if you really dig into the 400 pages of the new law. 1- All debtors will have to get credit counseling before they can file for bankruptcy – and additional counseling on budgeting and debt management before their debts can be wiped out. You know. Many people who lose their jobs, when their spouse disappears (death, divorce), or are hit with severe illness, are probably good at budgeting and managing their finances. The last thing they need at the time of despair is attending classes. They need to spend their time to put bread on the table, rather than spending time with credit counselors and harassment by the collectors of 35% interest rates “institutions”. 2- Because the new law imposes new requirements on lawyers, it will be tougher and more expensive to find an attorney to represent you in a bankruptcy case. Net effect: The lawyers get richer, the poor bankrupt guy gets poorer. 3- If your income is more than “the median”, you must pass “the means test” in order to file for Chapter 7. Oops. Now, go and dig into the new law and see how “the median income” is defined, and by whom. You may disagree with Ralph Nader [here](http://www.dissidentvoice.org/Articles3/Nader_Bankruptcy.htm), maintaining that the new law has converted the government into a glorified collection agency working for the avaricious merchants of consumer debt. But the truth of the matter is that most bankruptcy petitions are filed by people with real financial problems, often the result of [family illness, loss of jobs, accidents and divorce](http://www.washingtonpost.com/wp-dyn/articles/A28522-2005Mar11.htm). > [@John Mace](#): > > 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? First of all, I am sick and tired of some dopers with dogmatic, categorical and egocentric views calling anyone who disagrees with them “Ranters” and “Trolls”. That is a tired and old technique used by hooligans that merely mock their opposition, rather than presenting a rational and convincing argument backed by credible references. You simply denigrate yourself and lose credibility by calling people “Ranters” – right off the bat. Second, in answer to your question, “change” can be good or bad, depending on what is the purpose of the change, and who is benefiting from it at what cost to the effected. The lines of people that I am supposedly “Ranting about” is a clear indication that the change in the laws is bad for the people with real financial problems cause beyond their control, as cited above. ---
**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 22, 2005, 3:45pm UTC](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343/116 "2005-10-22T15:45:42Z")
> [@Liberal](#): > > Don’t do that here. […] Why don’t you take it to the Pit or something. Or open a new thread. The Pit is quite unnecessary; this is merely a question about how your philosophy operates in practice. (Indeed, I’ve never held any particular animus towards you even though we have our differences; _you_ have pitted _me_ on a couple of occasions, but I have never felt the need to return the favor.) However, I’m happy to open a new thread, [and have done so](http://boards.straightdope.com/sdmb/showthread.php?t=340995). I look forward to your participation. [Previous page](https://boards.straightdope.com/t/the-bankruptcy-lines-the-revenge-of-the-capitalists/326343.md?page=5)