John Oliver takes a look at how personal bankruptcy works

During the last decade, ProPublica Reports, the number of people filing for bankruptcy is on the rise in the United States, with “the number of consumer bankruptcies filed each year ranging from approximately 800,000 to 1.5 million.”

Now, with the long-term financial impact of the coronavirus pandemic weighing heavily on many Americans, Last week tonight Host John Oliver noted: “Many fear that once the current pandemic assistance ends, more and more people will need the kind of help that bankruptcy offers.”

But how exactly does personal bankruptcy work? In a segment of his Sunday show, Oliver took a deep dive into how bankruptcy works, why people ask for it, how complicated the legal process can be, the fact that there is more than one type of personal bankruptcy (there are two: Chapter 7 and Chapter 13) and the consequences of filing for it, including social stigma.

“This general stigma is common and completely wrong, because bankruptcy is not just caused by bad decisions. It is often caused by bad luck – inevitable challenges like job loss, divorce, surprise medical bills, or maybe even, you know, once in a century-long global pandemic, “Oliver said.” And while bankruptcy is often characterized as an easy way out, the way it is currently being put together, this sometimes isn’t an outing at all. “

It is into this system and its history that Oliver really leans, ranging from the Bankruptcy Reform Act of 1978 to rising consumer spending and debt in the midst of the advantageous period of continued industry deregulation. credit cards. Then came the industry lobbying for the important Bankruptcy Abuse Prevention and Consumer Protection Act 2005, “which made filing for bankruptcy much more complicated than before, which in turn made it much more expensive, which meant that many people found themselves in a situation where they could not afford to do so. bankruptcy, ”Oliver said.

It’s a very complicated website for people already having to navigate – a site that many end up trapped in, finding themselves in a worse place than they started.

“The point is, something big has to happen here,” Oliver concluded, “because we really need to get our broken bankruptcy system back on track for the people who are in desperate need of a lifeline. “

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