kasia
03-10-2005, 07:09 PM
Posted 3/10/2005 6:46 PM Updated 3/10/2005 8:17 PM
By Jennifer Brooks, Gannett News Service
WASHINGTON — The Senate on Thursday passed sweeping changes of the nation's bankruptcy laws.
Sen. Ted Kennedy, D-Mass., shown here at a minimum wage rally, blasted the bankruptcy law changes.
By Win McNamee, Getty Images
Stringent new standards would require tens of thousands of people who seek bankruptcy protection to repay at least part of what they owe and make it harder for them to wipe away their debts. The Senate voted 74-25 to pass the bill and it is expected to pass in the House.
The bill was blasted by consumer groups and the majority of Senate Democrats, who say the vast majority of people filing for bankruptcy protection were forced into it by medical crises, job loss or divorce — not irresponsible spending. Critics said the bill would be unduly harsh on ordinary debtors, without closing loopholes still open to wealthy debtors and corporations.
"All that matters in this bill is for the credit card companies to have more profits," said Sen. Ted Kennedy, D-Mass.
Democrats tried unsuccessfully to amend the bill to exempt veterans, active duty troops, senior citizens and families facing staggering medical bills from the new standards. The majority shot down dozens of proposed amendments, including efforts to link the bill to a minimum wage increase, an abortion provision and an effort to cap credit card interest rates.
Sen. Joseph Biden, D-Del., who sided against his own party to support the bill, argued that it will reform serious problems with the current bankruptcy system, including a provision that allowed debtors to stop paying child support if they filed for bankruptcy protection.
The bill would tighten standards for people attempting to file for Chapter 7 bankruptcy, which is set up for people who fall so deeply into debt they have no hope of repaying what they owe. Debtors turn over a portion of their assets and in return, their debt is wiped away. The bankruptcy bill would tighten the standards for this category, and sweep an estimated 30,000 to 100,000 people a year into Chapter 13 bankruptcy instead. In Chapter 13, debtors are put on a stringent repayment schedule, their wages are garnished for years, in an effort to repay as many creditors as possible.
The nation's creditors stand to recover millions of dollars in assets if the bill becomes law. Banks credit card companies have spent millions of dollars to lobby for the bill over the past eight years. They have contributed more than $24.8 million to federal candidates and political parties in the past five years, according to the Center for Responsive Politics' study of campaign finance and lobbying disclosure reports.
President Bush has identified the bankruptcy bill as one of his top legislative priorities this year.
By Jennifer Brooks, Gannett News Service
WASHINGTON — The Senate on Thursday passed sweeping changes of the nation's bankruptcy laws.
Sen. Ted Kennedy, D-Mass., shown here at a minimum wage rally, blasted the bankruptcy law changes.
By Win McNamee, Getty Images
Stringent new standards would require tens of thousands of people who seek bankruptcy protection to repay at least part of what they owe and make it harder for them to wipe away their debts. The Senate voted 74-25 to pass the bill and it is expected to pass in the House.
The bill was blasted by consumer groups and the majority of Senate Democrats, who say the vast majority of people filing for bankruptcy protection were forced into it by medical crises, job loss or divorce — not irresponsible spending. Critics said the bill would be unduly harsh on ordinary debtors, without closing loopholes still open to wealthy debtors and corporations.
"All that matters in this bill is for the credit card companies to have more profits," said Sen. Ted Kennedy, D-Mass.
Democrats tried unsuccessfully to amend the bill to exempt veterans, active duty troops, senior citizens and families facing staggering medical bills from the new standards. The majority shot down dozens of proposed amendments, including efforts to link the bill to a minimum wage increase, an abortion provision and an effort to cap credit card interest rates.
Sen. Joseph Biden, D-Del., who sided against his own party to support the bill, argued that it will reform serious problems with the current bankruptcy system, including a provision that allowed debtors to stop paying child support if they filed for bankruptcy protection.
The bill would tighten standards for people attempting to file for Chapter 7 bankruptcy, which is set up for people who fall so deeply into debt they have no hope of repaying what they owe. Debtors turn over a portion of their assets and in return, their debt is wiped away. The bankruptcy bill would tighten the standards for this category, and sweep an estimated 30,000 to 100,000 people a year into Chapter 13 bankruptcy instead. In Chapter 13, debtors are put on a stringent repayment schedule, their wages are garnished for years, in an effort to repay as many creditors as possible.
The nation's creditors stand to recover millions of dollars in assets if the bill becomes law. Banks credit card companies have spent millions of dollars to lobby for the bill over the past eight years. They have contributed more than $24.8 million to federal candidates and political parties in the past five years, according to the Center for Responsive Politics' study of campaign finance and lobbying disclosure reports.
President Bush has identified the bankruptcy bill as one of his top legislative priorities this year.