Jim Blaine has been a respected member of the credit union community too long for me to imply that he deliberately manipulated figures to prove his rather na?ve point regarding the impact of bankruptcy (CU Journal, Feb. 24). I will, however, state that he used myriad insignificant "facts" to buttress a really weak position.
The most glaringly erroneous of the statistics quoted, figures do not lie but liars figure anon, were those regarding estimates of bankruptcy petitioners labeled "can pays." These figures were obviously compiled from a simple review of the schedules in the petitions filed by the debtors attorneys, which are seldom if ever challenged, by the trustee at the first meeting of creditors or by populist judges who are loath to grant 2004 meetings for purposes of examining petitioners.
I do not dispute his contention that losses directly related to bankruptcy among credit unions are not overwhelming- yet. Nevertheless whatever these losses are, members have to cover them-a perversion of Aesop's ant and grasshopper fable wherein the grasshopper mugs the ant. Be that as it may it totally ignores the real issue of dead beats and that is the alarming rate of increase in Chapter 7 filing. Such filings were up over 200% in the supposedly flourishing economy between 1997 and 2002. If this trend continues, and we have every reason to believe it will accelerate, what is now an acceptable loss ratio as relates to losses from bankruptcy will be totally unacceptable. One wonders if those who buy into the lie that 90% of bankruptcies are a direct result of job loss, marital problems, medical bills, and exorbitant interest rates-when in fact less than 15% of bankruptcies are a result of these factors-even did an in depth study of petitions.
Are we going to wait until the dam bursts before we patch up the leaks?
As usual I will conclude my diatribe about bankruptcy by stating that it is not the bankruptcy code that needs to be reformed. As written, the code provides debtors a chance for a fresh start while protesting creditors from claims not filed in good faith. In point of fact what needs to be reformed is the system itself. Trustees are derelict in discharging their duties and judges hand down decisions that not only have no basis in law but rather contravene the actual rules. It is a populist court run to guarantee its expansion and the "laws" be damned.
With respect, Jim, you have bought into a lie and you have missed the point in so doing.
"Extreme justice is extreme injustice." -Cicero
John U. Barker
Hudson River Teachers FCU
Cortlandt Manor, NY