Copyright 2001 Gannett Company, Inc.
USA TODAY
March 16, 2001, Friday, FINAL EDITION
SECTION: MONEY; Pg. 1B
LENGTH: 455 words
HEADLINE:
Senate OKs bankruptcy overhaul Critics say limiting debt
discharge hurts women, lower-income families
BYLINE:
Tom Squitieri
DATELINE: WASHINGTON
BODY:
WASHINGTON -- The Senate passed sweeping
legislation to overhaul
the U.S. bankruptcy code and make
it more difficult for individuals
to jettison debts, overcoming objections
that it discriminates
against women and lower-income families.
The measure was approved on an 83-15 vote, backed by 47 Republicans
and 36 Democrats.
"This is an important change to a very flawed
banking system,"
said Sen. Robert Torricelli, D-N.J.
Supporters
of the measure, including credit card companies, banks,
retailers and auto
lenders, say current laws are being abused
by individuals who can afford to
pay back some of their debts.
They maintained such practices drive up the
cost of credit for
everyone.
Opponents argued that lenders
should shoulder some of the blame
-- and pain -- for contributing to some
bankruptcies through loose
lending standards.
Changes in bankruptcy law had been pushed heavily
by business
lobbies since a spike in such cases occurred in the late 1990s.
In 1984, 285,000 individuals filed for bankruptcy;
the number
was 1.4 million by 1998. But recently, such cases have declined.
President Bush has indicated he will sign the legislation.
Among the 36 Democrats voting in favor of the bill was Sen. Hillary
Rodham Clinton, who, as first lady, convinced her husband to veto
bankruptcy reform legislation last year. Now New York's
junior
senator, Clinton said she decided to support the bill because
it
included amendments to soften the impact on debtors, such as
protecting
child support payments.
The Senate rejected amendments that would
have made it more difficult
for wealthy debtors to shield their incomes from
creditors and
beat back an amendment to protect lower-income debtors.
The Senate voted 60-39 to set a $ 125,000 limit on how much of
the value of their homes debtors can protect in bankruptcy.
Currently,
such homestead exemptions are set by individual states and range
from zero in five states to no limit in five others.
Critics
said current law allowed wealthy people to keep million-dollar
homes while
claiming to be broke.
Democrats did succeed in making it harder for
landlords to evict
bankrupt tenants; they also included an amendment that
bars people
from using bankruptcy court to dodge
court-ordered fines for crimes
such as blocking access to
abortion clinics.
Still, some complained the bill
was too friendly to business.
"Is it too much for the U.S. Senate to
be on the side of consumers?"
said Sen. Paul Wellstone, D-Minn. "Or are we
on the side of the
sleaziest loan sharks?"
Before the measure
can go to Bush, the House and Senate must get
together to reconcile
differences in each other's bills.
LOAD-DATE: March 16, 2001
