S8 E9: Bankruptcy, Daunte Wright & Darius the Bunny: Last Week Tonight with John Oliver

Police Brutality and Media Fatigue

• The recent shooting of Daunte Wright by a 26-year veteran of the police force has led to a cycle of protests, calls for peace, and police overreaction, with the officer claiming it was an accident and the local police department flying a Thin Blue Line flag (38s).
• The police response to the protests has been anything but peaceful, with the use of tear gas, rubber bullets, and flashbang grenades, creating more tension and anxiety in an already emotionally exhausted city (1m13s).
• The city of Chicago released video of one of their officers killing a 13-year-old unarmed child, Adam Toledo, which contradicted the police's initial account of an armed confrontation (1m43s).
• This show has been on the air for seven years, covering the multiple ways police terrorize communities of color, including police militarization, overuse of municipal violations, and lack of accountability (2m14s).
• The history of policing in America is inextricably linked with white supremacy, and the show has repeatedly covered these issues, but the problem persists, with black people continuing to be killed by the police they pay for (2m28s).
• The show's writers are exhausted, and the black writers on staff have set up an out-of-office reply saying "Nah", indicating their emotional exhaustion (3m8s).
• To break the cycle of covering the same issues, the show will take a different approach and provide some "tiny pieces of stupid, silly joy" before plunging back into the fight (3m20s).

Darius the Missing Bunny

• The first story of the night concerns a giant bunny, specifically a Guinness World Record-holding rabbit named Darius, who has gone missing (3m40s).
• Darius, the world's longest bunny, has gone missing, and his owner, Annette Edwards, is offering a $1,000 reward for his safe return, as he is now too old to breed and is considered useless for that purpose (4m12s).
• Darius's disappearance has brought attention to his various business ventures, including children's books, a calendar, and a world tour (4m54s).

Usher's Strip Club Visit and Olympic Uniforms

• A claim circulated online that Usher tipped Vegas strippers with fake money featuring his face, but the strip club has since clarified that Usher converted thousands of real dollars to tip the dancers and was a true gentleman (5m35s).
• Ralph Lauren unveiled the uniforms for the US Olympic team to wear during the closing ceremony in Tokyo, which have been met with criticism for their aesthetic (5m57s).
• The US Olympic team has been outfitted by Ralph Lauren since 2008, and their uniforms have consistently been criticized for not accurately representing the country's diverse culture (6m16s).
• Team Canada's Olympic uniforms have also been unveiled, featuring a twist on the iconic Canadian tuxedo, but have received mixed reviews for their design (6m42s).

Naked Canadian MP

• A member of the Canadian Parliament was caught naked on a virtual House of Commons meeting and has since apologized, stating he was changing into his work clothes after going for a jog (7m28s).
• A Canadian MP was caught on camera naked during a virtual meeting, and his fellow MPs addressed the incident in a polite and exceedingly tactful manner, with one member stating that the MP should be reminded of what is appropriate and to control his camera (8m42s).
• The incident was met with humor and was seen as a lighthearted moment in an otherwise demoralizing week, with the hope that it would bring some laughter and relief to viewers (9m42s).

Call for Change and Fox News Commercial

• The need for fundamental change in policing was emphasized, particularly in the context of state violence against black lives, and viewers were encouraged to take action and demand a better country where black people are treated with fundamental respect (9m59s).
• A commercial on Fox News was referenced, which targeted men over 45 with products for frequent urination, male sexual enhancement, and hair loss, using language that was seen as trying to appeal to a specific demographic (10m37s).

Bankruptcy and its Stigma

• The main story of the night concerned bankruptcy, which was introduced as a topic that is often associated with negative outcomes, such as on the game show Wheel of Fortune, or through ads for bankruptcy lawyers (11m22s).
• An ad for a bankruptcy lawyer was referenced, which told the story of a woman named Mary whose life was turned upside down by financial difficulties, and who was in need of help from a bankruptcy lawyer (11m37s).
• A lawyer's advertisement claims to have helped thousands of clients like Mary, who watched her husband get injured, and promises a fresh start from debts through bankruptcy (11m56s).
• The number of personal bankruptcies filed each year has ranged from about 800,000 to 1 and a half million, and many worry that once pandemic assistance stops, more people will need bankruptcy help (12m37s).
• Bankruptcy is a legal procedure that allows those deeply in debt to get out from underneath their debts and start anew, although it comes with consequences such as being on credit reports and social stigma (12m52s).
• Social stigma is exemplified in a clip from Shark Tank, where Jeff and Kevin O'Leary discuss bankruptcy, with Kevin calling it "radioactive" (13m12s).

Causes and Costs of Bankruptcy

• However, bankruptcy is not solely caused by bad decisions, but often by bad luck, unavoidable challenges like job loss, divorce, surprise medical bills, or a global pandemic (14m11s).
• Despite being characterized as an easy out, bankruptcy is sometimes not an out at all, as it can be expensive, with couples needing to spend at least $1,000 to claim bankruptcy (14m32s).
• Many people cannot afford to go bankrupt, which is a contradictory situation, as bankruptcy is meant to help those in debt (14m47s).

History of Bankruptcy and Credit Cards

• The modern bankruptcy code was enacted in 1978, around the same time the credit card industry began to enjoy deregulation, leading to a rise in consumer debt (15m19s).
• The credit card industry marketed themselves aggressively, creating a lucrative cycle of minimum payments, late fees, and interest hikes, which they didn't want bankruptcy to disrupt (15m33s).
• In the late 1990s, the credit card industry lobbied Senators, including Chuck Grassley, to curb what they framed as bankruptcy abuse, arguing that people who could afford to pay were using bankruptcy as an easy way to not pay bills and pass the costs on to others (15m52s).
• Senator Grassley repeated the industry's talking points, stating that every family in America pays $400 a year because of "deadbeats" who abuse the system, but this $400 figure is actually total nonsense and has been proven to be demonstrably false (16m11s).
• Despite the false narrative, the credit card industry pushed the idea of widespread irresponsibility and abuse around bankruptcy to create a moral justification for stricter bankruptcy laws (16m49s).
• Credit card companies were happy to help people get into significant debt, even if they had just declared bankruptcy, as seen in the case of Joan Bernett, who received a credit card offer shortly after declaring bankruptcy (17m10s).
• The banks were giving out credit with a reckless disregard for the consumer's ability to repay, and this led to a significant increase in debt and bankruptcy filings (17m28s).

The 2005 Bankruptcy Reform Bill

• Years of lobbying by the credit card and banking industry resulted in the 2005 Bankruptcy Reform Bill, which made it far more complicated and costly to file for bankruptcy (17m54s).
• There are two main types of personal bankruptcy: Chapter 7 and Chapter 13, with Chapter 7 being the more common type where debts are mostly wiped out, and Chapter 13 being a reorganization of debt where finances are examined to work out a repayment plan (18m15s).
• Chapter 13 has its benefits, such as not having to give up assets like a house or car, but if even one payment is missed, the case could be dismissed, and the whole deal is off (19m1s).
• Chapter 13 is also more expensive to file, with attorneys charging on average about $3,800, compared to $1,300 for Chapter 7 (19m32s).
• Chapter 13 bankruptcy allows individuals to keep their house and car, but it costs three times as much as Chapter 7 in the long term, making it a less desirable option for many people (19m45s).

Chapter 13 vs. Chapter 7

• Despite the higher cost, Chapter 13 can seem like a better financial option because it allows law firms to offer a "no money down" plan, which can be appealing to those who are already struggling financially (20m17s).
• Some lawyers may guide clients towards Chapter 13 when they would be better off with Chapter 7, and research has shown that attorneys are more likely to recommend Chapter 13 to black couples than to white couples (21m4s).
• Nationally, the odds of black debtors choosing Chapter 13 over Chapter 7 are more than twice as high as white debtors with similar financial profiles (21m28s).
• This disparity can lead to black people being pushed into bankruptcy options with less successful outcomes, resulting in a higher likelihood of having to file for bankruptcy again (21m49s).

Repeat Filings and Non-Dischargeable Debts

• Financial experts like Susie Orman have been criticized for framing repeated bankruptcy filings as a moral failing, when in fact many people who file for bankruptcy do so due to circumstances beyond their control (22m0s).
• Experts argue that Orman's claim that most bankruptcy filers file twice is incorrect, and that many people who do file for bankruptcy multiple times do so due to factors such as being pushed into the wrong type of bankruptcy (23m8s).
• Certain debts, such as those from criminal penalties, taxes, or child support, cannot be discharged through bankruptcy, and another significant category includes student loan debt, as 31-year-old Red Miller Suly Monova discovered after graduating with an $80,000 student loan from New York University in 2008 (23m45s).

Student Loan Debt and Credit Counseling

• Student loan debt can be a significant burden, with some individuals having worse debt than Monova's $80,000, and the current system can add insult to injury through mandatory credit counseling courses (24m20s).
• These courses can be patronizing and have been called "innane" and a "procedural hurdle without value or consequence" by bankruptcy judges, with one judge even recommending that participants seek a job making higher wages (24m49s).
• The courses may have limited value, with one online course acknowledging that credit counseling may not work for some debtors and that the exercise may be pointless (25m13s).
• The assumption in these courses is that individuals are in debt due to reckless personal behavior, which can be insulting to those who have gone bankrupt due to circumstances beyond their control, such as having to leave a job to care for a child with a serious illness (26m1s).
• One woman who went bankrupt after having to leave her job to care for her son who died from cystic fibrosis found the credit counseling course to be a "slap in the face" and had to log off and walk away from it (26m14s).
• The course is a requirement both before and after filing for bankruptcy, and the idea that it can help individuals avoid making the same mistakes in the future can be hurtful, especially for those who have experienced a traumatic event such as the loss of a child (26m34s).

Flaws of the 2005 Law

• The current bankruptcy system has its roots in the 2005 law that expanded the non-dischargeability of student loan debt, made bankruptcy harder to complete, and added over a dozen ways for technical errors to result in dismissal, ultimately benefiting credit card companies (27m8s).
• The law led to a disproportionate decrease in bankruptcy filings in poorer neighborhoods, with a 32% decrease compared to richer neighborhoods, indicating that the system became more expensive for the rich and nearly impossible for the poor (27m38s).
• Ideally, those responsible for the 2005 law, including President Joe Biden, who was a crucial supporter, would acknowledge the need for reform, as the system badly needs fixing (27m57s).
• Joe Biden, who is from Delaware, home to major credit card companies, was warned about the potential consequences of the law by Elizabeth Warren, then a Harvard law professor, but he focused on the concerns of creditors rather than those struggling with medical debt (28m5s).

Proposed Reforms and Current Situation

• Elizabeth Warren proposed the Consumer Bankruptcy Reform Act in December, which would overhaul the bankruptcy system, eliminate excessive paperwork, make student loan debt dischargeable, and combine chapters 7 and 13 into a new, more flexible chapter 10 (29m35s).
• While President Biden has expressed broad support for Warren's reforms, the plan is unlikely to pass in its entirety due to the need for 10 Republican Senate votes and the opposition of some Democrats (30m7s).
• Something significant needs to happen to fix the broken bankruptcy system, which is desperately needed by those seeking a lifeline, and in the meantime, an alternative credit counseling course could be offered (30m25s).
• Many people are struggling with debt due to various reasons such as job loss or unexpected events, and are looking for a fresh start through bankruptcy, which can be a complex and discouraging process (30m41s).

Credit Counseling and Types of Bankruptcy

• Under current bankruptcy law, individuals are required to complete a credit counseling course before filing for bankruptcy (31m15s).
• There are two main kinds of personal bankruptcy: Chapter 7, which typically allows for the discharge of most debts, and Chapter 13, which works differently and can be more complicated (31m20s).
• The bankruptcy system is designed to be confusing and discouraging, often leading people to give up on the process (31m40s).
• Filing for bankruptcy is a serious and often unpleasant process, but it should be made simpler and more accessible for those who need it (32m8s).