Copyright 2000 The Hartford Courant Company
THE
HARTFORD COURANT
December 12, 2000 Tuesday, STATEWIDE
SECTION: EDITORIAL; Pg. A18
LENGTH: 405 words
HEADLINE: A
FLAWED BANKRUPTCY BILL
BODY:
Banks and credit-card
companies have complained for years that it's too easy for people to shirk their
debts by filing for personal bankruptcy.
Tightening the system is a
worthy goal, but a bill approved by Congress deserves a presidential veto. The
bill's central provision makes sense. It would require that those earning more
than a state's median income repay some of their debts. Specifically, those who
could repay $6,000 to $10,000 over five years would be required to do so.
However, the bill that sailed through the House on a voice vote and was
approved by the Senate 70-28 last week should be vetoed because it:
*
Fails to eliminate the homestead exemption. This loophole allows wealthy debtors
in some states to keep their mansions when filing for bankruptcy, which is
unfair to moderate-income debtors, especially renters. The bill would narrow the
exemption, but not close it.
* Allows anti-abortion
protesters convicted of destroying property to use bankruptcy
as a way to escape fines and civil judgments.
* Puts credit-card debts
on the same basis as debts like child support, a provision that would hurt
single women and children.
Bankruptcy reform became a pressing issue in
recent years because of the soaring number of filings, from 330,000 in 1980 to
1.4 million in 1999. Well over half of all filings come under Chapter 7 of the
Bankruptcy Code, which excuses virtually all debts.
Those who owe money
should be legally required to repay it. Bankruptcy laws should never make it
easy for anyone to skip out on legitimate debts.
That said, it's hard to
feel much sympathy for banks and credit-card companies that send out billions --
yes, billions -- of offers each year trying to lure potential customers with
offers of easy money, then act surprised when they can't pay their monthly
bills.
One good feature of the bill approved by Congress is a
requirement that credit card companies would have to explain to customers in
their monthly statements how long it would take to pay off balances if they made
only the minimum payment.
Nevertheless, President Clinton ought to
follow through on his threat to veto this flawed reform measure. Next year,
Congress should try again to get it right.
A balance should be struck
between the legitimate concerns of financial interests and the plight of
consumers in circumstances that cause them to take the drastic step of filing
for bankruptcy.
LOAD-DATE: December 12, 2000
