WSJ Opinion -
[Cached Version]
Published on: 11/26/2002
Last Visited: 11/26/2002
The commission, chaired by Madison attorney Brady Williamson, studied bankruptcy for two years in the mid-1990s and produced a 1,300-page report with 172 recommendations.But when Congress put together bankruptcy legislation, the commission's work was overwhelmed by lobbying and $20 million in campaign contributions from the lending industry.
Bankruptcy law should remain geared to giving debtors a second chance while preserving the creditors' right to be paid to the extent reasonable.
The lending industry, however, used its influence to tilt the reform in favor of debt collection.For example, banks and retailers that issue credit cards try to put their cards in the hands of as many people as possible, even poor credit risks.But there's a consequence of such profligate lending: Sometimes people file for protection from creditors under bankruptcy law, and their debts are reduced or discharged.