The Accumulating Troubles for Katrina Victims

Victims of Hurricane Katrina who may have come to believe that they cannot count on the Federal government for help in the days following the disaster may soon have to face another obstacle, this time, one imposed by Congress just months ago - The new Bankruptcy Code.

The newly enacted Code "has been criticized by consumer-rights advocates and finance experts for turning the bankruptcy courts into 'collections agencies' for credit card companies such as MBNA." www.consumeraffairs.com/news04/2005/katrina_bankruptcy03.html. It also expands the definition on non-dischargeable debts, diminshing the potential for relief in filing bankruptcy at all.

The new law has a particularly troubling impact on those who may have lost financial records since the new Code requires that debtors prove that a debt cannot be resolved by a means other than bankruptcy - the Code's so-called "means test." Without records, this burden may be difficult to surmount.

Displaced families are now finding themselves facing increasing credit card balances, continued mortgage payments for houses that may no longer exist, costs for alternate housing and new clothes and other necessities, all while many find themselves without employment, at least for the time being.

They need relief.

Federal Government's Response
In response to this universally acknowledged consequence, representative F. James Sensenbrenner (R-WI) has refused to even hold a hearing as to whether it would be appropriate to waive the new bankruptcy laws as applied to Katrina victims. Sensenbrenner also holds the proud distinction of being one of 11 Republicans to vote AGAINST the hurricane relief package. www.consumeraffairs.com/news04/2005/katrina_bankruptcy03.html.

Apparently the American public, in times of distress, are left to rely on the kindness and generosity of their fellow man and charitable corporations. To their credit (no pun intended), MBNA has announced that it will waive 2 months of payments and late fees for Katrina victims. VISA has also announced that it will offer more lenient terms to hurricane victims. http://www.cnn.com/2005/US/09/14/katrina.credit.ap/

My Opinion
It is a sad circumstance where Americans are finding more sympathetic and fair treatment from credit card companies than from the officials we have elected to protect our interests.