This weeks personal finance brain trust question was:
Which U.S. presidential candidate will most likely do more to help debtors and/or reform current bankruptcy regulations? Feel free to elaborate.
WC – A 27-year-old writer living in Chicago and writing about personal finance through The Writer’s Coin.
This question seems like a veiled attempt at asking “who are you voting for?” But just in case it isn’t, here’s what I think: whoever winds up winning this election will have to—at some point—say something to the effect of “Things are a lot rougher than we thought, and everything I said during the campaign has become obsolete. Therefore, we can’t do everything we promised.”
Unfortunately, candidates can’t really tell the truth about what they’re thinking when really bad things happen. Both candidates knew that they would have to compromise their plans due to the economic downturn we’re going through, but they can’t say that because the opponent would slam them, attack them, etc.
Either way, whoever wins will have a lot more work to do and more restrictions to follow through on what they’ve promised.
Patrick Bryan – Living in Northern Ireland, Patrick helps people in a very different environment and economy but yet, mush is universal and much is the same. Visit Patrick’s Northern Ireland blog on debt.
As both an outsider to the US elections and a lifelong non-voter I am probably not qualified to give a response to this question however my instincts say that if one candidate is going to do something for debtors, it is Obama.
Obama voted against the 2005 Bankruptcy Bill which was seen as removing some key rights for debtors and favouring the banks instead. McCain supported the Bill. Obama is a supporter of the Credit Card Bill of Rights and appears to place this issue high on his political agenda. McCain strikes me as being part of the establishment, conservative and change-resistant, and for that reason I believe that he will not want to rock the boat too much if he is voted into office.
If Obama is elected however I would certainly expect his proposals on bankruptcy reform to become watered down; members of his own party for example helped pass the 2005 Bankruptcy Bill, and any legislation he proposes will almost certainly be opposed by lobbying from the banks and other large creditors (remember the government is a creditor too, i.e. the IRS). We are finding in the UK that there is a lot of inertia surrounding proposals to reform our bankruptcy system and we are still waiting on draft legislation to be enacted which were put forward by the current government back in 2005.
Antisay – This blog is mainly about finance and self-improvement; I am in a constant race to become a better me and this blog is all about that sort of lifestyle. Visit this site.
The truth is that no candidate will help debtors. We could spend hours hashing out the different tax policies of each candidate, debate over who has the better ideas, or ague whether smaller or bigger government would be better for us as a society right now….
When it boils down to it, however, the truth is that no candidate – no president – will ever fix a debtor’s life or financial situation. It seems a majority of US citizens hold the president or the government responsible for fixing their lives, when in reality that is the responsibility of the individual. Reforming bankruptcy regulations or changing lending laws will not solve many problems… they may ease some people along, but the fact remains that those in trouble will always be in trouble until they get themselves out.
I have my opinions on who should win, but voting one way or another will never improve or lessen one’s chances of getting out of debt. With a lot of hard work, a budget, and a heck of a lot of patience, ANYONE can get out of debt. It doesn’t matter what your taxes are, what rights credit cardholders have, or if we have public healthcare or not.
Work at it and you’ll get there.
Gerri Detweiler – She has been helping consumers find solutions to their credit problems for more than twenty years. Her newest book is Stop Debt Collectors: How to Protect Your Rights and Resolve Your Debts. She serves as Credit Advisor for Credit.com.
In my view, it is pretty clear which candidate would be more helpful to debtors: Barack Obama. He voted against the Bankruptcy Reform Act in 2005 (which took a lot of courage, as many from both parties voted for it), and he has spoken out numerous times in favor of bankruptcy reform to help alleviate the current housing crisis.
John McCain appears to favor the type of reform we’ve seen implemented so far: measures that favor Wall Street but have yet to have a significant or direct impact on Main Street.
Steve Rhode – A personal finance blogger and founder of the Myvesta Foundation, a global scoial enterprise that helps people find solutions for money troubles. You can ask Steve your debt related question through GetOutOfDebt.org and he’ll help you for free.
Having lived through and closely watched the bankruptcy reform act of 2005 I will admit that I have no faith in the Bush administration to do what is best for people with financial troubles. I have also been very disappointed by the lack of effort of the current Republican ticket of McCain-Palin to speak specifically about reversing the senseless bankruptcy reform of 2005 which only hurts consumers. Just recently there was a great article about the farce that the bankruptcy reform created.
The voting record for the Bankruptcy Reform Act of 2005, bill number S 256, was:
I was actually surprised to see the list of those that voted against the bill, all democrats.
On the Obama-Biden side I am both encouraged and disappointed. I’m disappointed that Joe Biden represents Delaware, the home of some of the most offensive banks against consumers and that he voted to go along with the bankruptcy reform act debacle. However, Barack Obama has a long and clear record of standing up for consumers, speaking about about credit card company tactics and rocking the boat for positive change in consumer protection to defend consumers from abusive lending practices.
As I said previously:
With so little time before the next presidential election it is a good time to take a quick look at some important issues that are impacting the wallets and purses of the American consumer.
Under the Bush administration consumers were significantly harmed by unreasonable and unfair bankruptcy reforms that clearly helped big business, hurt consumers and only made bankruptcy more expensive for the same people that still need to file for protection.
A future administration for change and putting people first should strongly look at repealing or enacting legislation to turn back the hands of time to allow consumers in an ever-tightening economy, to have more reasonable access to bankruptcy.
The Obama-Biden ticket has promoted a Credit Card Bill of Rights for some time now and it would be beneficial to see the McCain-Palin ticket pledge to work diligently to put similar protections in place.
In my research for my article on John McCain’s Bad Credit Card Rates, I also found the following information:
It appears that Barack Obama has a very good grasp on the problems faced by people in America today that are carrying credit card debt. An article in the Chicago Sun-Times reveled a number of comments that Senator Obama made regarding credit card debt.
“For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford,” Obama said. I agree.
Obama said he knew only too well how easy it was to get caught by deceptive credit card deals: “In the interest of full disclosure, I’ve gone through this. I’ve had credit cards.” Wouldn’t it be nice to have a President that actually lived through credit card debt and cares about all the consumers in financial pain?
According to the Bankruptcy Law Network:
Senator McCain called the bill, “…an important step toward a fair and balanced approach to restoring personal responsibility to our federal banking system.”
Senator Obama did state at a January, 2008 debate, in response to a question about the 2001 and 2005 bankruptcy bills, “I opposed them both. 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.”
So based on the previous record of Barack Obama, the hope for change, the reality of republican erosion of consumer rights on their watch, and the need for greater protections for consumers from unfair financial practices, I think any debtor looking for a positive change on consumer debt issues will find more chance of effective leadership on these issue from Barack Obama.