I refuse to discuss the latest Brewer meltdown in today's post, so let's go to another topic: bankruptcy.
There is a member of our fantasy baseball league that will from time to time send out an email posing a question for discussion. Yesterday's was: "If you guys were in Congress would you vote yes or no on the stricter bankruptcy laws?"
I immediately replied "yes" as I believe that bankruptcy is now seen as an easy, quick fix to irresponsible people who pile up debt then want a way out of paying for it. Being in mortgage myself, I have seen thousands of loans where people have not just 1 or 2 maxed out credit cards, but 4 or 5. People go out and get cards for every store they could conceivably go to and use it as much as possible. Too many people believe it's their inalienable right to get credit, abuse it, then be absolved from it by saying "Oops, my bad". It's rewarding financial mismanagement.
The counter argument was that a Harvard study released earlier this year showed that approx 50% of all bankruptcies were from "Major Medical Bankruptcy". However, bankruptcies where people had $1000 of unreimbursed medical expenditures in 2 years were included as "major". $1000 over 2 years? That is $41.66/mo, which is hardly a hardship. The study even says that the "debtors' out-of-pocket medical costs were often below levels commonly labeled catastrophic". The study does not prove to me that medical costs are the leading cause of bankruptcies in the US.
Yes, there are people who do come across catastrophic events in their lives, and should things go poorly for them, they should have this as an option. However, bankruptcy should be deemed as a last resort, not a quick fix.
Feel free to comment your thoughts. I know that there is a lot to say on this topic, but I didn't feel like writing a huge manifesto.
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