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House Approves Bankruptcy Bill

Bankruptcy reform legislation (H.R. 333) was approved, 309-108, by the House on March 1.

The measure, sponsored by Rep. George Gekas (R-PA), received committee approval on February 14 (see The Source, 2/16/01, p. 1). The bill largely reflects a bankruptcy reform conference report (H.R. 2415) approved last year by both chambers. That measure was pocket-vetoed by President Clinton in December (see The Source, 12/8/01, p. 1).

Aspects of the bill that would affect women and families were highlighted during floor debate. Rep. Marge Roukema (R-NJ) said the bill would provide “a giant step in terms of protecting child support,” by making “those payments number one” for repayment when noncustodial parents file for bankruptcy. She described the bill as “a safety net for those who need it most.”

Commenting on the provisions related to alimony and child support collection, Rep. Louise Slaughter (D-NY) said the bill “forces women and children to compete with powerful creditors, such as credit card issuers, to collect their claims after bankruptcy.” She added, “The bill divides the pie into more pieces, leaving less for women and children who are owed child support.”

Rep. Carolyn Maloney (D-NY) voiced opposition to the bill because it does not include a provision related to the Freedom of Access to Clinic Entrances (FACE) Act (P.L. 103-159). When House and Senate conferees meet to negotiate differences between their bills, she said, the conference report should include language to keep those convicted under the FACE Act from discharging fines associated with those convictions. “Clinic bombers should not be allowed to excuse penalties assessed on them by the courts through bankruptcy,” she stated.

Rep. Sue Kelly (R-NY) voiced support for the overall measure, praising its efforts to reduce bankruptcy abuse. “The people who are truly being hurt by our current bankruptcy system are Americans who play by the rules and pay their debts,” she said, adding: “It is the people who game the system that we have to stop.”

Rep. Lucille Roybal-Allard (D-CA) said the bill “is good for credit card companies and bad for consumers.” She added: “A fair bill…would take into account the fact that most of the people who declare bankruptcy have been through trying ordeals such as divorce, unemployment, and illness resulting from exorbitant medical bills they can’t afford to pay.”

The House defeated, 160-258, a Democratic substitute amendment representing an alternative proposal for bankruptcy reform. Several other amendments were considered, including:

  • an amendment by Rep. Sheila Jackson Lee (D-TX) to give public schooling costs the same status as private schooling costs as allowable expenses for bankruptcy filers, which was approved by voice vote;
  • an amendment by Rep. Mark Green (R-WI) to prevent the disclosure of the names of children included in bankruptcy filings, which was approved by voice vote; and
  • an amendment by Rep. Jackson Lee that would have expanded allowable expenses to include health insurance premiums and costs associated with caring for foster children, which was defeated, 160-258.

Senate Mark-up
The Senate version of bankruptcy reform legislation (S. 420) was approved, 10-8, by the Senate Judiciary Committee on February 28. Floor debate on the measure is scheduled to begin on March 5, although Sen. Paul Wellstone (D-MN) has stated his intention to filibuster the bill.

Like H.R. 333, the Senate measure was drafted to largely reflect last year’s pocket-vetoed conference report. While all Democratic amendments were defeated during the mark-up of H.R. 333, the Senate committee approved several amendments to S. 420.

The committee approved, by voice vote, a compromise amendment regarding convictions under the FACE Act. Sen. Charles Schumer (D-NY), sponsor of the amendment, sought to bar those found guilty of threats, violence, harassment or property damage aimed at owners, workers, and patrons of abortion clinics from discharging fines resulting from those convictions. However, before the committee took up the amendment, Sen. Schumer negotiated a compromise version with Committee Chair Orrin Hatch (R-UT). He agreed to broaden the language to cover all individuals who are convicted and fined for targeting “anyone who provides or obtains legal services.”

Several other amendments were considered, including:

  • an amendment by Sen. Patrick Leahy (D-VT) to allow bankruptcy filers to include as reasonable and necessary expenses any funds spent on chronically ill or disabled children and grandchildren who are not their own dependents, which was approved by unanimous consent;
  • an amendment by Sen. Russ Feingold (D-WI) to forestall eviction for single mothers who file for bankruptcy, which was approved by unanimous consent,
  • an amendment by Sen. Feingold to provide more flexibility in the definition of allowable household goods for bankruptcy filers, which was defeated 8-10; and
  • an amendment by Sen. Dianne Feinstein (D-CA) to require parental responsibility for charges exceeding certain limits on credit cards granted to underage consumers, which was defeated 7-11


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