Awesome. So people with health problems will have a harder time getting loans. And if he caps interest rates, they could get shut out entirely.
Oh, lets see: Should I feel bad for Credit Card companies that charge usurious rates? Hmm, NO.
Should I feel bad for Credit Card companies who extend credit to credit risks, and then have those credit risks seek bankruptcy protection? Hmm, NO.
I've never heard of unsecured loans having such conditions. Besides the old bankruptcy laws pretty much allowed chapter 7 for any reason.
The US has the highest per capita rate of bankruptcy of any industrialized country. Even though Canada has an identical system of consumer and mortgage debt the per capita rate of personal bankruptcy in Canada is nearly 40% lower than what it is in the US. The difference is almost entirely the result of the number of bankruptcies that are the result of what are called “catastrophic” health costs.
Under the previous Bankruptcy code medical debts were treated like other debts and the bankruptcy court had the power to deal with the ability of the bankrupt to repay the debt. However, the revised code takes that power away from the court and provides no reasonable alternative for the debtor. Financial professionals deal with bankruptcy everyday and they know you need to clear the financial deadwood from the system and where possible return it to a productive state. On the other hand, the health care system is filled with financial amateurs who thought they would get more money by simply holding debtors hostage to their insolvency. It was an incredibly dumb option totally inconsistent with an efficient capital market system.