Copyright 2001 Chicago Sun-Times, Inc.
Chicago
Sun-Times
August 9, 2001 Thursday
SECTION: FINANCIAL; Pg. 58
LENGTH: 497 words
HEADLINE:
Biden expected to back bankruptcy bill
SOURCE:
Bloomberg News
BYLINE: Bob Gravely
DATELINE: WASHINGTON
HIGHLIGHT:
First USA, other credit card firms want
tighter law
BODY:
Credit card industry lobbyists
led by Bank One's First USA say they are confident that Sen. Joe Biden will
deliver the tightening of U.S. bankruptcy laws they've been seeking for four
years.
Biden, who represents Delaware, the home state of MBNA Corp.,
First USA Bank and other credit card companies, has become the swing vote among
13 senators who'll try to negotiate with House counterparts a final version of
legislation to force more consumers to repay credit card and other unsecured
debt.
"Biden is the linchpin," said Travis Plunkett, a lobbyist for the
Consumer Federation of America, a group that opposes the bill as being too harsh
on debtors. Industry lobbyists say they are counting on Biden, a Democrat, to
vote with Republicans to keep the bill intact, and fend off Democrats' efforts
to add consumer protections that the industry opposes.
"We're pretty
optimistic it's going to pass pretty quickly," said Joe Rubin, who lobbies
Congress on the issue for the U.S. Chamber of Commerce.
Negotiations
with the House over the bankruptcy bill are set to begin next month. Supporters
hope to have the bill to President Bush before the end of the year. The Senate
passed the bankruptcy bill 83-15 in March, two weeks after the House passed its
version of the measure on a 306-108 vote.
House and Senate negotiators
trying to meld the two versions into a single bill must resolve two tricky
issues. One issue involves capping the amount of home equity debtors could
shield from creditors during bankruptcy; the other aims to
prevent those convicted of committing violence at abortion
clinics from using bankruptcy to escape financial liability and
court costs.
The bill would force debtors with incomes above the state
median and an ability to repay over five years either 25 percent of their debts
or $10,000, whichever is less, to file for bankruptcy under
Chapter 13 of the code instead of Chapter 7.
Roughly two-thirds of
personal bankruptcy filings now occur under Chapter 7, which allows debtors to
absolve debts after liquidating some assets. Supporters of the bill say some
well-to-do debtors can abuse the current system.
Biden has said he'll
work to maintain the main sections of the bill which the industry has been
pushing since 1997, when personal bankruptcies were approaching a record high
1.3 million.
Lobbyists for the industry say that will make all the
difference.
"Not having him there would have placed the future of the
bill in this Congress in jeopardy," said Scott Talbott, a lobbyist who follows
the issue for the Financial Services Roundtable, which supports the bill.
Under Chapter 13, bankruptcy courts impose a plan on debtors that
requires them to repay most of their debts.
The National Retail
Federation estimates the bill would affect 11 percent of all bankruptcy cases
and force consumers to repay an additional $11 billion in debt
annually that otherwise would be discharged.
Bloomberg News
LOAD-DATE: September 4, 2001
