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Washington Mutual Inc. got what it wanted in 2005: A revised bankruptcy code that no longer lets people walk away from credit card bills.

The largest U.S. savings and loan didn't count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.

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http://bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer=home

I've never understood this, personally. What do they do, in that case, if people can't pay their credit card bills? I mean, whether they declare bankruptcy or not, they're still not going to be able to pay the bills. So what do they get out of it by not allowing people to go bankrupt, if they have no money to pay? Garnish their wages to the point where they have no money to live?

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If a bank did that to me, I'd quit my job. I wouldn't bust my ass working for no paycheque.

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I guess I just wonder what bankruptcy is supposed to be for, if you can't use it to dig yourself out of unmanageable debt. Credit card debt often happens BECAUSE there is no social safety net to speak of, so if someone loses their job or has a huge legal bill (or in the US, a huge medical bill) to pay, you end up using credit cards if you have them.

Student Loans

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The Bill, if enacted, will amend the student loan provisions, ss. 178(1)(g) and (1.1), so as to provide for:
• a non-dischargeability period of two years from the end of studies (reduced from the current ten years).
• the mercy, or hardship, hearing (in which the court may discharge a student loan despite the bankruptcy having been filed during the non-dischargeability period) may take place at any time, rather than, as at present, only after the expiration of the non-dischargeability period; and
• the court may, at the mercy hearing, fix payment terms and conditions for the student loan, and may discharge part of the debt (rather than all or nothing, as under current jurisprudence:

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