HOW TO GET CREDITORS OFF YOUR BACK WITHOUT LOSING YOUR SHIRT

This mean-spirited tract for our times explains the important changes in federal bankruptcy law that take effect October 1, emphasizing Chapter 13--the so-called Wage Earners Plan, which allows overspenders to discharge past-due obligations over periods of three or more years under court supervision without the discomfiture of actually going bust (Chapter 7). Kaplan, a Chicago lawyer who seems to have made a career of counseling credit junkies, takes an advisory rather than admonitory approach. He notes that debtors resorting to Chapter 13, unlike those declaring bankruptcy, are not required to forfeit any personal assets. Chapter 13 can be used, besides, to compel creditors to accept reduced payment schedules, suspend all interest or carrying charges, and, in some cases, settle for amounts less than are owed. And once a Chapter 13 plan has been filed with a court trustee, all collection efforts must cease. This means that the fiscally feckless are protected against not only harassing phone calls and dunning letters but also wage assignments, repossessions, property liens, and judgments. Even the IRS can be kept at bay. Late in the game, Kaplan concedes that Chapter 13 of the Bankruptcy Reform Act of 1978 ""may become a bonanza for irresponsible. . . debtors and a nightmare for credit-granting institutions."" The principal loophole: legitimate objections to discharge that can foul up Chapter 7 filings do not apply in Chapter 13. Thus, sharpshooters as well as hardship cases can propose paying unsecured creditors, say ten cents on the dollar and escape 90 percent of their obligations. Nonetheless, the text offers a wealth of examples attesting to the advantages of the easy way out--meanwhile plugging the bankruptcy bar and denigrating its natural enemies, non-profit counseling services, which, the author claims, are largely subsidized by self-interested creditor organizations. In sum, an instructive but appallingly amoral handbook for those at wallet's end.