If you buy a car and fail to make payments on it, should the seller have the right to repossess? Once again the answer seems plain, and once again can be more complicated.
Suppose that your income is based on sales made possible only through the use of that car, traveling door-to-door to make your sales? Well, in such situations different states have different provisions. If bankruptcy threatens, or is invoked, prime assets aren't taken from you: namely, your house and your car (in Texas, two cars).
And so it goes. But the story of the day, making media rounds, could be written by advocates of quickie bankruptcies. You find your debt overloaded? File for Chapter 7, and start out from scratch, giving up only what can be positively identified as unnecessary to your basic needs. To be sure, when you apply a second time for credit, the credit agencies will look more carefully at your application, requiring, e.g., a larger down payment on the purchase of a house.
But the main story going out these days, using The New York Times account by Philip Shenon as an example, pays little heed to the excesses of the appetites of the borrower, focusing rather on the cupidity of the lender. For instance:
The avarice of the credit card industry is unmistakably there. Invitations to sign up are everywhere, the costs of doing so understated. What tends to happen is credit card ballooning, keeping one company at bay while living off the second, in turn kept at bay while living off the third and fourth, and so on.
Although it is impossible to unearth concrete details from The New York Times story, the proposed laws make it more difficult simply to turn on the Chapter 7 tap when the water has got too hot. America is, and has been since the days of the Yankee hustler, a country given to industrious merchandising. The philosophical question is: To what extent should the state interpose itself to guard against (a) deceptive merchandising, and (b) opportunistic buying?
To represent a product as other than it is violates laws. Laws forcing fuller disclosure of the consequences of indiscreet purchasing through credit cards should be welcome. But the news stories should cover the gluttony not only of the credit card companies, but also of credit card consumers.
