Household HSBC Watch

Household International and HSBC pushed hard for bankruptcy reform, saying filers were deadbeats and scam artists. We’ve been called worse by Household and HSBC. It turns out they were wrong with their stereotype.

In what will undoubtedly be the first of many “I told you so” reports, the National Association of Consumer Bankruptcy Attorneys has found that, overwhelmingly, people who file for bankruptcy protection aren’t deadbeats who went on shopping sprees with the intention of shirking their debts.

That’s quite contrary to what was being claimed by supporters of the new federal bankruptcy law that went into effect last October.

For years, those proponents argued that billions of dollars were being lost because people were simply being allowed to walk away from their debts.

“As retailers, we have seen firsthand the dramatic effect bankruptcy has had on both consumers’ finances and on our ability to serve the public,” wrote Steve Pfister, senior vice president for government relations at the National Retail Federation, in a letter to House members as the bankruptcy bill was being debated. “These filings ultimately cost the tens of millions of households we serve hundreds of dollars each in unseen costs every year. Unfortunately, many of those losses are the result of misuse of the law by irresponsible, higher-income filers.”

Thanks Steve. But lawmakers believed the hype, Bush agreed, and the bill became law making life harder for the average American.