Consumer Bankruptcy Journal Summer 2017 - Page 29

THE BANKRUPTCY CRISIS IN CHICAGO Mr. Bovitz, the use of the gentle word “debtor” in the modern Bankruptcy Code (as opposed to the more descriptive word “bankrupt” in the Bankruptcy Act) is reflective of modern political correctness where every child gets a participation trophy for just playing on a sports team and (as Lake Wobegon’s Garrison Keillor quips) “all the children are above average.”] What were the causes of the uptick in Chicago filings in the 1950s? Unsophisticated immigrants from the deep south? Easy credit? Fine print in unconscionable contracts? Immoral debtors? Aggressive collectors? Debtor attorneys? Bankruptcy mills? All the above? The author of Bankrupt in 10 told the sad story of one young couple (with a 3-year-old son). The family acquired an “expensive convertible, bought on time.” In 1956, the father slew his family and then shot himself. A coroner determined that the man had committed suicide “while temporarily insane due to depression over financial affairs.” [Footnote: Today, debtors do not seem to have the same concern about their financial failures. See, e.g., In re Curtis Jackson, aka 50 Cent. Jonah Bromwich, 50 Cent Tells Bankruptcy Court Piles of Cash in Photos Were Fake, New York Times, March 10, 2016 (“A judge in Connecticut has asked the rapper 50 Cent, who filed for bankruptcy protection last year, to explain Instagram photos showing him posing next to or near large piles of cash, including one picture in which bills are arranged into letters spelling out the word ‘Broke.’ “). https://www.nytimes. com/2016/03/11/nyreg, ion/50- cent-bankruptcy-fake-cash- money-bills.html?_r=0.] According to Bankrupt in 10, garnishments were causing a loss of jobs because employers did not want the extra paperwork associated with wage garnishments. The loss of jobs led to more petitions. Bankrupt in 10 interviewed the Hon. Wallace Streeter, a Chicago based bankruptcy referee. Streeter assigned blame on Southern migration to Chicago. These new unsophisticated residents were falling “into the same pattern of spending -- and credit trouble.” Bankruptcy referee Victor LaRule also suspected that many of the individual filers were recent unsophisticated immigrants. (On November 27, 1957, a Chicago Daily News reporter explained that borrowers could rely on the southern merchants to set fair credit terms. In contrast, in the North, “fast-talking fringe merchants” would say one thing and do something different to get the sale.) [Footnote: Chicago Daily News, Sat. October 12, 1957, page 4.] According to Bankrupt in 10, the fine print in sales contracts was another trap for consumers. The Better Business Bureau noted that used car dealers used “[s]ome of the most vicious installment plan tricks....” The Better Business Bureau provided the case history of a man who thought he was purchasing a vehicle on time for $128.00. After the installment contract was signed, the salesman informed the purchaser that there would be an additional finance charge of $214.00. [Footnote: Every time that Mr. Bovitz rents a car, Bovitz reads one full paragraph of the fine print on the contract. Bovitz National Association of Consumer Bankruptcy Attorneys Summer 2017 estimates that he will complete his rental contract review by 2020.] According to Bankrupt in 10, debt adjustment counselors were behind an increase in bankruptcy filings. Local bankruptcy attorneys accused loan firms and debt adjustment counselors of charging a lot of money which could be put to better use. [Footnote: This is still a problem. See Debt Adjustment Companies: Should you Trust Their Promises? (“These ‘debt adjustment’ companies often make grandiose claims about how they will significantly cut your credit card debt and resolve your money problems. Yet many of these companies are not reputable, and trusting them with your money could end up putting you in even worse financial straits.”). http:// consumer.georgia.gov/news/ press-releases/view/debt- adjustment-companies-should- you-trust-their-promises.] Bankrupt in 10 offered the following solutions to ease the bankruptcy crisis: enact laws to eliminate deceptive merchant practices; educate consumers to spend monies responsibly and to understand consumer contracts and their implications; place limits on garnishments; and prosecute attorneys who push consumers into unnecessary bankruptcy filings. [Footnote: Respectfully, Mr. Fox does not support prosecution of attorneys for filing bankruptcy petitions.] Jack Mabley was a Chicago based newspaper columnist. [Footnote: https://en.wikipedia. CONSUMER BANKRUPTCY JOURNAL 29