Friday, February 02, 2007

Credit Slips: Gone to Texas

The phrase "G.T.T." or "Gone to Texas" was shorthand for a debtor who had moved to escape creditors. It is no coincidence that the United States enacted a permanent bankruptcy law about the same time as the frontier closed. Is history repeating itself? Debtors cannot move to the frontier anymore to escape their creditors, but is going underground the new "Gone to Texas?"

This comment also made me think about some of the concerns that were raised about the harsh 2005 bankruptcy law. Its proponents even admitted that the goal was to get fewer people to file bankruptcy. Of course, shutting the door to the bankruptcy courthouse does not solve hopeless financial problems. It just leaves consumers with hopeless financial problems with one less place to turn for a solution. I like to analogize the law and its proponents to shutting down a hospital and claiming to have cured disease.

You can see the rest of the post by clicking on the title above.

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