National Bankruptcy Day

January 12th, 2009 by BankruptcyCorner

There has been some recent traffic online that touts February 10, 2009, as National Bankruptcy Day. As a bankruptcy information Web site, we think it is a great idea to bring attention to bankrupty and the many reasons that people should consider bankruptcy as an option when faced with insurmountable debt.

The only problem is that this particular incarnation of National Bankruptcy Day has very little to do with raising bankruptcy awareness. Instead it is a publicity campaign against what it calls the unintended consequences of the Consumer Product Safety Improvement Act passed by Congress last year in the wake lead and other hazardous chemicals being found in products that were manufactured in China.

The law requires that all products sold for use or consumption by children be tested for lead beginning February 13, 2009. Under the original rules being considered by the Consumer Product Safety Commission, all products that were intended for use by children would have to be tested for lead beginning on that date. If they were not tested, the items would be considered hazardous waste that was in violation of the law.

Many owners of resale shops and thrift stores have said that they will most likely have to close their doors and declare bankruptcy when the rules go into effect on February 13.

The commission has backed off the requirement under pressure by owners and operators of such shops. They announced last week that products in those stores would not have to be tested, but that the owners of the stores would still be liable if the products contained hazardous chemicals.

Opponents of the commission’s interpretation of the law say that the law will subject small business owners and charity run resale and thrift shops to untold liability for products on their shelves.

Vague rules and no standards for testing are cited by groups like the National Association of Manufacturers who say that the commission is rushing to implement the law without considering the consequences. The group submitted a 15 page petition to the commission in an attempt to get clarification for the lead testing rules before the law goes into effect.

Others who will be impacted by the law include artisans and craftspeople who create one of a kind items that may be used for and by children. Before the items could be sold, they would have to certifiy that they have been tested and contain less than 600 parts per million.

Costs associated with testing would likely drive small, independent producers out of the manufacture of products for children. In these difficult financial times, it is hard to believe that Congress intended to make it impossible for products, such as garments made by Native Americans for dance groups and children, to be subjected to so much testing that it becomes impossible for the tribes to promote their culture.

Losing more businesses to bankruptcy over product testing rules in an economy that seems to be shedding jobs everyday seems a waste. Maybe Congress and the Consumer Product Safety Commission can clarify the law before National Bankruptcy Day and keep small businesses and artisans working.