The Bankruptcy Code attempts to exclude from its shelter those who “abuse” the system. Chapter 7 has a provision in Section 707(b) that allows a challenge to the entitlement of a debtor to get a dishcarge under that chapter. However, only a debtor whose debts are “primarily consumer” debts is subject to this scrutiny. One whose debts result from business failure or failure to pay their taxes are not subject to review for “abuse”, regardless of their ability to pay.

That came home to me as I interviewed a single man with a fine salary, yesterday. He is exempt from the means test because his debt was incurred in business. There is certainly a policy argument for making the consequences of business failure tolerable. That is, I think, a hallmark of the American business ethic, the acceptance of failure and the encouragement of trying again.

The exclusion from the “can-pay” scrutiny for those who haven’t paid taxes seems to me to be harder to justify. Our society isn’t stronger for a policy protecting those who haven’t paid their fair share of maintaining our infrastructure.

Which leads you back to the unstated premise underlying the means test, that all consumers who can’t pay their bills are to some degree dishonest. My learned opinion is HOGWASH.