Obama and Bankruptcy Reform
Senator Barack Obama, United States presidential hopeful, has been campaigning against many of the changes that were made under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. Senator Barack Obama would like to see some of these reforms eliminated especially for families forced into financial crisis due to medical bills. He also would like to eliminate bureaucratic paperwork, fast track certain eligible families through the bankruptcy process and eliminate the mandatory credit counseling. Senator Obama is especially concerned with hardships suffered by military families, elderly individuals and disaster victims.
The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made many changes to bankruptcy law. It is now more difficult for higher income individuals to file for Chapter 7 Bankruptcy. They are now forced into Chapter 13 Bankruptcy which requires them to repay some of their debt under a bankruptcy repayment plan. Credit counseling is also required for all individuals filing for bankruptcy protection.
Senator Barack Obama has openly criticized the 2005 reforms from their inception, "I think they were bad ideas, because they were pushed by the credit card companies, they were pushed by the mortgage companies, and they put the interests of those banks and financial institutions ahead of the interests of the American people. And this is typical." Most critics have argued this law was anti-consumer and it benefited credit card companies, mortgage lenders and car loan lenders.
Proponents of the Bankruptcy Abuse Prevention and Consumer Protection Act however, felt that it was the first step toward personal responsibility. Senator John McCain voted for BAPCPA along with 74 other United States Senators. John McCain felt the bankruptcy reforms were "an important step toward a fair and balanced approach to restoring personal responsibility to our federal banking system." Only 24 United States Senators opposed the bill. There has been a dramatic decrease in bankruptcy filings since the passage of the law in 2005, which proponents argue means the bill has been a success at eliminating past abusers of the bankruptcy system.
Senator Barack Obama believes with his new proposed bankruptcy reforms he will be fighting against the banks and credit card companies which he has stated continue to "tilt the playing field in their favor, at the expense of hardworking Americans." Obama has consistently castigated John McCain as being a candidate who is out of touch with the needs of the middle class.
The weak economy, gas prices, job layoffs and the housing crisis will continue to make bankruptcy discussions critical in the future election to determine who will become president of the United States of America.