What John Oliver Has to Say About America’s Broken Bankruptcy System?
Comedian and television host John Oliver uses some humor and amusing film clips to puncture some myths about personal bankruptcy and illuminate a serious topic.
In a recent segment of the show Last Week Tonight, Oliver says that when the term “bankruptcy” comes up, many people’s first association with the word is that it’s the worst possible outcome on the game show Wheel of Fortune. You don’t want the wheel to land on bankruptcy. Other people are mainly familiar with bankruptcy through the over-the-top ads of some lawyers on late-night television.
But kidding aside, Oliver notes, the number of consumer bankruptcies each year has ranged from 800,000 to 1.5 million. Oliver says that many believe that once the government financial assistance linked to the pandemic ends, many more people may need the type of financial relief that bankruptcy protection offers.
“Bankruptcy is a legal procedure through which people who are deeply weighted down by debt can get relief from debt and have a chance to start anew, which is good,” Oliver says.
Oliver says the stigma that filing for bankruptcy is a moral failing is common and completely misguided.
“Bankruptcy is not solely caused by bad decisions,” Oliver says. “It’s often caused by bad luck and unavoidable challenges, like job loss, divorce, surprise medical bills, and perhaps even a once-in-a-century pandemic.”
Oliver said that years of congressional lobbying by credit card companies and the banking industry resulted in significant revisions to the federal bankruptcy code in 2005, making it far more complicated to file for relief. There are two main kinds of personal bankruptcy detailed in Chapter 7 and Chapter 13 of the bankruptcy code.
- In a Chapter 7 bankruptcy, many types of debt get discharged and certain assets are sold to pay off creditors, granting filers a fresh financial start.
- A Chapter 13 bankruptcy is a reorganization of your debt in a repayment plan to pay off your debts over three to five years. A Chapter 13 bankruptcy gives you a chance to keep your house and car. If you fulfill the terms of the repayment plan, certain debts can be discharged. But if you miss a payment, your bankruptcy case can be dismissed, putting you back to square one.
A Chapter 13 bankruptcy that requires an individual to pay no money upfront may sound more appealing to an individual filing for bankruptcy. But it’s typically more expensive in the long run.
Oliver notes that certain kinds of debt cannot be discharged through bankruptcy such as taxes, student loans, child support, or criminal penalties. He said that the current bankruptcy system needs major reforms to help people who need a lifeline and financial relief.
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The White Plains bankruptcy law firm of Michael H. Schwartz, P.C. can help you seek debt relief, including an immediate end to the calls from creditors and debt collectors. Contact us for a consultation.
Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.
