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Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House
Congressional Testimony
March 16, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 555 words
HEADLINE: TESTIMONY March 16, 1999 RICK BOUCHER CONGRESSMAN
HOUSE JUDICIARY COMMERCIAL AND ADMINISTRATIVE LAW
BANKRUPTCY REVISION
BODY:
STATEMENT OF CONGRESSMAN Rick BOUCHER Before the Subcommittee on Commercial
and Administrative Law Committee on Judiciary U.S. House of Representatives
Tuesday, March 16, 1999 MR. CHAIRMAN, thank you for the opportunity to appear
before you and Members of the Subcommittee on Commercial and Administrative Law
of the House Judiciary Committee. I was pleased to join with you Mr. Chairman
and my friends and colleagues Representative Bill McCollum and Rep. Jim Moran
in introducing the
"Bankruptcy Reform Act of 1999.
" This legislation is intended to ensure that our
bankruptcy laws operate fairly, efficiently and free of abuse. Our legislation is
virtually identical to last year's conference report which was the product of
nearly two years of hearings, mark-ups, deliberation and compromise. I am
hopeful that H.R. 833 will be one of the first bipartisan exercises in the
106th Congress. And it is fitting that a first bipartisan
exercise is on the highly important subject of
bankruptcy reform. In an era where disposable incomes are growing, unemployment rates are low,
and the economy is strong, consumer
bankruptcies should be rare. Contrary to this expectation, in 1998 there were more than 1.4
million
bankruptcies, a 40% increase from 1996 when the number of filings reached I million for the
first time.
Bankruptcies of convenience are driving this increase.
Bankruptcy was never meant to be used as a financial planning tool, but it is becoming a
first stop rather than a last resort as many filers who can repay a substantial
portion of what they owe use the complete liquidation provision of Chapter 7
rather than the court supervised repayment plan of Chapter 13.
Our legislation will direct more filers into Chapter 13 plans. This is a
consumer protection measure. The typical American family pays a hidden tax of
$500 each year arising from increased costs of credit and the increases in
prices for goods and services occasioned by the discharge of $50 billion in
consumer debt in
bankruptcy proceedings each year. By requiring that people who can repay a substantial
part of this debt do so in Chapter 13 plans, we will lesson that hidden tax.
Another key point should be made about the provisions of our bill. The alimony
and child support recipient is clearly better off under our bill than under
current law. At the present time, she stands 7th in the rank of priority for
the payment of claims in a
bankruptcy proceeding. She is behind farmers
making claims against grain elevators. She is behind fishermen making claims
against warehouses. Under our bill the child support and alimony recipient
will have priority number one. Her claim will be first in line for payment.
Other provisions also make it easier for her to execute against the assets of
the bankrupt's estate than under current law. Last year, this measure when
considered as a conference report received 300 votes on the floor of the House
reflecting a broad bipartisan agreement that this
reform is necessary. I look forward to working with Mr. Gekas and Mr. McCullom to
obtain early approval of our bill by the Judiciary Committee and with our other
cosponsors, including Jim Moran and Steve Rothman as we obtain passage of this
bill in the House. The enactment of this
reform should be one of the early successes of the 106th.
LOAD-DATE: April 12, 1999