On Monday, I posted a note about the increase in the bankruptcy filing fee from $155 to $200. The increase was supposed to pay for 28 new bankruptcy judges (at a 5-year cost of $25 million) but the government now estimates that the increase will raise an additional $125 million over the next five years. In other words, we have a new tax just for people who are broke.

But the bankruptcy bill started in the Senate, and only the House can impose new taxes. So the House added section 6042 to (of all things) the Emergency Supplemental Appropriations Act For Defense, The Global War on Terror, and Tsunami Relief, so that Congress could initiate this new tax. The day after I posted my note, the House and Senate Conference on that bill met and raised the Chapter 7 filing fee again by another $20—to $220. We hear that it will pass this week or next.

Why extract $225 million over five years in general tax revenue from people who are already broke? Are they kicking debtors just because they can? Or is this just another play at the margins—a way to keep the poorest, most desperate families from declaring bankruptcy? Is this one more move to keep bankruptcy available only for the well-to-do?

We know most people go numb over numbers. But this is wrong, and hiding it behind decimal places won’t make it right. Where are the no-new-taxes folks? Where are the help-struggling-families advocates? Let’s gear up again and let our senators and representatives know that this “fix” is whipping families that have already been beaten unconscious.

Imagine this conversation:

You: I'd like a bar of soap, please.
Cashier: Sure. That'll be ten dollars.
You: Ten dollars for a bar of soap?
Cashier: It's very good soap.
You: Yes, but --
Cashier: Besides, you can afford it, can't you?
You: Sure, I can afford it today. But what happens when my cell phone bill comes in tomorrow and I find out my daughter's run four hours over our minutes?
Cashier: Oh, don't worry. It sounds pricey, but if it turns out you can't afford it, just give back the soap and we'll write it off.
You: Wait, you'll really do that?
Cashier: We promise. We have to. It's the law.

This is the the conversation every cardholder has with Visa. Credit's pricey. Sometimes it's so pricey you find out later you can't afford it. A million and a half families found this out last year.

To make up for it, Visa promises to forgive the debt if you're stuck with unexpected bills. True, bankruptcy laws force them to make this promise. But it's part of the deal from the start.

So what if, after the deal is done and you're giving Visa your money, they tear up the contract and rewrite the terms in their favor? You're stuck paying a high price for something worth a lot less.

In law school, we call that "breach of contract." Most people call it welching on a deal, not meeting your end of the bargain, or just plain breaking your promise.

It turns out that all the Hill debate about bankruptcy as promise-breaking wasn't far off. They just fingered the wrong suspect. Debtors weren't the ones breaking their promises. Debt forgiveness was part of the deal from the get-go.

The real promise-breakers were creditors, whose welching (leaving a hundred million families stuck paying the old, high prices for new, harsh terms) is now known as the Bankruptcy Bill of 2005.

Nowadays politicians’ favorite mantra seems to be “lower taxes.” Corporate taxes. Estate taxes. Taxes on millionaires. Taxes on working folks. The We-Hate-Taxes leadership in Washington says “cut ‘em all.”

This “No New Taxes” routine (with a little “No Old Taxes, Either” tacked on) has one glaring exception: A big tax increase on folks who are broke. The Bankruptcy Bill President Bush signed into law last week raised the fees on every family that files from $155 to $200.

What, you thought no one below median income would suffer? The new taxes, like almost every other provision in the bill, apply to everyone—no matter how low their income.

The (public) reason was to pay for 28 new judgeships created by the bill, but the numbers are a little off. The government estimates the five-year cost of the new judges at $25 million, but the government puts the five-year net revenues (from the fee increase alone) at about $150 million.

So will the fee be lowered? Of course not. That money will go where taxes usually go -- straight to the general revenue coffers – fresh from the hides of people in desperate financial trouble.

Congress has kicked these families when they are down by passing a harsh new bankruptcy bill, and then kicked them again with a tax to fatten general revenues. Get sick? Lose your job? Trying to save your house? Boy, have we got a tax for you.