John Tierney: “We have heard for some time now supporters of this bill urging us to believe that we face a bankruptcy fraud epidemic…”

“We have heard for some time now supporters of this bill urging us to believe that we face a bankruptcy fraud epidemic, with an exponentially increasing number of debtors who, but for the fact they are in bankruptcy, otherwise would pay their debts. Instead we find out, as one study says, that some 3.6 percent of chapter 7 debtors would hardly be able to pay any more of their bills if bankruptcy were not an option. That hardly constitutes a bankruptcy fraud epidemic, as advocates of the bill claim. More often, filing for bankruptcy is not a way out for scam artists, but a critical source of relief for common people trapped in unfortunate, and sometimes dire, circumstances. Among the many egregious shortcomings of this particular bill is the absence of a definitive provision to allow the coverage of reasonable medical expenses whether a debtor does or does not have health insurance coverage. Certainly we all share the goal of ensuring that the bankruptcy system is not used as a shield for irresponsible spending decisions. But debt repayment should not preempt reasonable and necessary medical expenses.”