Something I’ve wanted to do for a while has been to put together a series of posts examining where the 2008 presidential candidates stand on bankruptcy, debt, and personal finance issues. The candidates have starkly differing views on a number of fundamental economic issues, and weighing these differences is going to be a top priority for voters this fall. Without further ado, therefore, here’s where the candidates stand on the very important issue of individual bankruptcy:

Barack Obama on Bankruptcy (Issues Page)

Sen. Obama has made bankruptcy issues a talking point in his campaign. Here he is speaking in Powder Springs, Georgia last week about his proposals to make bankruptcy law fairer and to fast-track the bankruptcy process for military families, among other reforms:

This speech echoes a number of familiar themes for Obama, who has been prominent on bankruptcy and lending issues since he arrived in the Senate in 2005. He voted against the Orwellian “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” a horrible piece of legislation that has made it harder for millions of Americans to seek bankruptcy protection, and he accuses Washington—and John McCain in particular—of standing up for the interests of big banks and credit card companies instead of for the American people. He is harshly critical of the loophole in the current bankruptcy law that allow bankruptcy courts to modify the loan for a borrower’s second home, but not their primary home.

Obama proposes to reform the bankruptcy laws to make it easier for individuals to seek debt relief when they file for bankruptcy protection due to medical expenses. He also wants to raise the homestead exemption and enact other reforms that would make it easier for seniors to keep their homes.

John McCain on Bankruptcy

Sen. McCain’s record on bankruptcy issues is not good. He voted for the 2005 bankruptcy bill, calling it “an important step toward a fair and balanced approach to restoring personal responsibility to our federal banking system.” As the bill was being debated, Senate Democrats introduced a number of amendments in an effort to reduce the punitive impact it would have on working families. McCain voted no on almost all the amendments, even ones that would have extended some protections to individuals whose financial problems were due to medical problems or identity theft.

McCain’s economic issues page say nothing about bankruptcy. He does mention the subject on a page devoted to veterans’ issues, touting his support of an amendment by Sen. Jeff Sessions (R-Ala.) that would have protected veterans from being denied bankruptcy claims if they incurred their debts while on active duty—an amendment Obama voted against. However, what McCain doesn’t mention is that this amendment was a watered-down response to an earlier amendment offered by Sen. Richard Durbin (D-Ill.), which Sessions criticized as “overly broad.”. McCain voted against the Durbin amendment; Obama voted for it.

Coming next week: The Candidates on Mortgage and Foreclosure Issues