LEXIS-NEXIS® Congressional Universe-Document

LEXIS-NEXIS® Congressional

March 16, 1999, Tuesday

SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 291 words

HEADLINE: TESTIMONY March 16, 1999 JOE LEE HOUSE JUDICIARY COMMERCIAL AND ADMINISTRATIVE LAW BANKRUPTCY REVISION

BODY:
TESTIMONY BEFORE THE SUBCOMMITTEE ON COMMERCIAL & ADMINISTRATIVE LAW COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ON H.R. 833 "THE BANKRUPTCY REFORM ACT OF 1999" TUESDAY, MARCH 16, 1999 ROOM 2141, RAYBURN HOUSE OFFICE BUILDING WASHINGTON, D.C. SUMMARY OF TESTIMONY OF JUDGE JOE LEE ON H.R. 833 MARCH 16,1999 My statement is presented in three parts and incorporates exhibits and charts which are attached at the end of Part II. Part I: The impact on the economy and society if H.R. 833 is enacted has not been fully considered. Two million families could be forced to live at the poverty level while they repay a fraction of their debt. Part II: There was an event in 1978 that triggered an increase in consumer bankruptcy cases, but that event was not the enactment of the Bankruptcy Reform Act of 1978. By way of comparison, personal bankruptcy filings in Canada have increased significantly since 1968 - not because of any changes in the bankruptcy laws there, but because of the entry and development of the credit card industry in Canada in 1968. Deregulation of the credit card industry in the United States, which began in 1978, has resulted in an increase in the number of consumers overburdened by credit card debt seeking relief through bankruptcy. Part III: Congress has considered and has wisely rejected compulsory chapter 13 proceedings on other occasions. As early as 1937 Congress recognized that an effective and sensible debt repayment plan would have to be voluntary and of relatively short duration. Compulsory chapter 13 legislation may encourage predatory extensions of credit, just as Congress recognized in 1968 that unrestricted wage garnishments encouraged the making of predatory extensions of credit.

LOAD-DATE: March 17, 1999