Bankruptcy Code Didn't Need Fixing - the System Did

I find it paradoxical that in the same May 11th issue where you reported significant losses to credit unions due to bankruptcy, some letter writers were still touting the myth that the reforms in bankruptcy are unjustly punishing people who are in financial distress due to no fault of their own, i.e. lay offs, medical bills, divorce. I have been in business for longer than I care to remember and must have reviewed over 1,000 bankruptcy petitions, both Chapter 7 and Chapter 13, and in no more than 10% of such cases was the primary factor one of those hardship reasons. Rather it was irresponsible spending by the petitioners and a total absence of any feeling of responsibility on their part. True, in some cases these factors may have been the final straw that brought down their houses of "credit" cards. However, had they exercised any restraint in their spending habits the bumps in life that we all experience could have been weathered without filing for bankruptcy. One wonders who the defenders of the irresponsible think should pay for these billions lost through bankruptcy. We all pay in the long run not the lender. Unfortunately lost in all the rhetoric about punishing the "unfortunate" is the real problem in the administration of bankruptcy laws and that problem is bankruptcy judges and trustees. The bankruptcy code as written worked and was fairly equitable to both debtors and creditors. Once bankruptcy judges started tampering with the quite liberal provisions of the code via cram down, allowances of retention of collateral in specific violation of the rules, and making a mockery of Chapter 13 or Wage Earner petitions by allowing payouts of less than fifteen cents on the dollar, the losses to creditors began to mount at an alarming rate. If you want to retain some compassion for bankrupts while curtailing correct or rather what were existing provisions, stop judges from making law from the bench. John U. Barker COO/Treasurer Hudson River Teachers FCU Cortlandt Manor, N.Y.