Web posted and Copyright © October 15, 1998, American Bankruptcy Institute.
Web posted and Copyright
© October 15, 1998, American Bankruptcy Institute.
STATEMENTS
Sen. Charles
Grassley:
"I am disappointed our
efforts to seal the cracks in the consumer bankruptcy code did not prevail this
year. Progress toward a good-faith compromise faltered under aggressive lobbying
pressures and an unwillingness to negotiate a fair balance between creditors and
consumers. This means an American family of four will continue to shoulder a
$400-a-year 'bankruptcy tax' on goods and services. I'll be back next year to
build support for fair and effective bankruptcy reform.
"There's plenty of blame to share for the record breaking numbers of personal
bankruptcy filed in this country for three consecutive years in a row. An
overzealous credit industry, irresponsible consumerism and lawyer-run bankruptcy
mills have contributed to the growing number of consumers who misuse the
bankruptcy code as a financial planning tool. Finally this year the federal
government will set a better example for taxpaying Americans. For the first time
in three decades Washington has exercised fiscal discipline and erased the
federal deficit. Congress should take one step further and tighten the
bankruptcy laws to keep them in place for those who need a fresh start and
prevent those who abuse the system to avoid repaying their debts."
Sen. Grassley (R-Iowa) is the Chairman of the Senate Judiciary Committee Subcommittee on Administrative Oversight and the Courts and served as original cosponsor of S. 1301, the "Consumer Bankruptcy Reform Act." The Senator can be reached at 135 Hart Senate Office Building, Washington, DC 20510; or by fax at (202) 224-6020. Click here to email Sen. Grassley!
Rep. George
Gekas:
"I am concerned that we
have had such a tremendous increase in bankruptcy filings during a time of
economic prosperity. When the economy begins to turn, absent reform, we will
have many, many more bankruptcy filings. The White House could have played a
part in preventing that--along with encouraging basic personal
responsibility.
"Opponents of bankruptcy reform created confusion by raising the issue of unpaid child support. It is our position that children and ex-spouses should not be the victims of abuse in the bankruptcy system. Protecting women and children is one of the major goals of bankruptcy reform, and I hope we are able to again push for better treatment for women and children under bankruptcy law next year.
"The bankruptcy reform bill would have brought relief to American taxpayers--currently shouldering a $400 per family tax burden because of abuse in the bankruptcy system. Because reform was not enacted this year, that burden will continue to grow. I am hopeful that all of the efforts on this legislation will not be in vain, and that we will have the opportunity to pass real bankruptcy reform in the next Congress."
Rep. Gekas (R-Pa.) is the Chairman of the House Judiciary Committee Subcommittee on Commercial and Administrative Law and served as sponsor of H.R. 3150, the "Bankruptcy Reform Act of 1998." The Congressman can be reached at 2410 Rayburn House Office Building Washington, DC 20515-2817; or by fax at (202) 225-8440.
Philip
Corwin:
"I am disappointed that we
didn't get it done this year, but we made remarkable progress in just a few
short months; and I'm optimistic that we can get a very good reform package
enacted in the next congress."
Mr. Corwin is a principle lending industry lobbyist.
Gary
Klein
"The consumer bankruptcy
system dodged a bullet this year, but there is no doubt that the credit industry
will be back next year with all guns blazing. I hope we can start the nest
session with more narrowly targeted legislation directed at problems for both
consumers and creditors. The next few months will be a time for those who
understand how the system works, and the importance of bankruptcy relief to
consumers with legitimate financial problems, to point out the flaws in the
conference committee report."
Mr. Klein is a staff attorney at the National Consumer Law Center in Boston, specializing in consumer bankruptcy, mortgage secured credit and foreclosure law. Mr. Klein is author of the NCLC publication, Surviving Debt: A Guide for Consumers.
Joe
Lockhart
"We've made clear that we
would be willing to sign a bill that was close to the Senate version, that
balanced the obvious abuses in the system with the rights of consumers,
particularly, middle to lower income consumers. Unfortunately, they've moved
closer to the House version, which we find unacceptable."
Mr. Lockhart is White House press secretary.
Ken
Robinson
"Given the course of
bankruptcy legislation over the past few days, it was hardly a surprise when the
Senate disconnected it from life support. We had been pleased with the
reaffirmation portion of the bill agreed to by the conferees, and regret the
fact that agreement could not be reached in other areas. Many people have worked
long years on this issue, so naturally it is disappointing to come so close to
the finish line without being able to cross over. Now it's time to take a short
breather and get ready for the next Congress."
Mr. Robinson is president and chief executive officer of the National Association of Federal Credit Unions.
George
Wallace
"Although the lack of time
remaining in this legislative session may prevent resolving differences over
bankruptcy reform, reform continues to be an urgent need. The White House,
Senate and House of Representatives agree that our consumer bankruptcy system
demands reform. Consumer bankruptcy filings continue their precipitous rise. Use
of bankruptcy to defeat or delay the payment of child support and other marital
dissolution obligations continues to unfairly burden single parents and their
children. American consumers continue to pay for bankruptcies of convenience by
those who have the ability to repay all or part of their debts. 'Stigma'
continues to erode. On the commercial bankruptcy front, recent disruptions in
the financial derivatives and futures markets and the continued development of
global financial markets has underscored the shortcomings of our commercial
bankruptcy system. The bankruptcy reforms proposed in the Bankruptcy Reform Act
of 1998 would address these issues, as well as many others. If real reform
legislation does not pass Congress this legislative session, Congress will
pursue it as the 106th Congress begins."
Mr. Wallace is a partner with the Washington, D.C. firm of Eckert Seamans, Cherin & Mellot, concentrating in collection matters ad debtor representation. Mr. Wallace is counsel to the American Financial Services Association and is one of the architects of the House bankruptcy reform legislation.
Ed
Yingling
"We have established a
new legislative base for future action. While we're disappointed neither the
bankruptcy nor financial modernization bills were enacted, significant progress
was made on both issues. I believe both will be taken up again very early in the
next Congress.
"[American Bankers Association] is
disappointed that the balanced conference report that would have continued
bankruptcy relief for those in real need, while ending bankruptcies of
convenience, didn't pass this year. We believe it would have been a significant
achievement in restoring fairness, personal responsibility, and common sense to
our flawed bankruptcy system."
Mr. Yingling is the executive director of the government relations department of the American Bankers Association.
National Consumer
Bankruptcy Coalition
"Like the vast majority of Americans
who support reforming our bankruptcy laws, we are very disappointed that the
balanced and fair bankruptcy reform bill fell victim to the last-minute logjam
of legislation as Congress pushed toward adjournment. The bill has strong
bipartisan support in both houses and would have served as an important step in
restoring fairness and integrity to the bankruptcy process.
"Unfortunately, it is American families who clearly will
suffer the most as a result of this delay. Last year’s record 1.4 million
personal bankruptcies caused more than $44 billion in consumer debt to be wiped
out. Those losses are passed on to all consumers in the form of higher costs for
credit, goods and services. Americans who pay their bills on time are forced to
pick up the tab for those who walk away from their debts. With personal
bankruptcies expected to exceed two million within the next three years, the
delay in enacting sensible bankruptcy reform only means an increased burden on
responsible American families and the economy as a whole.
"Furthermore, the legislation, which states unequivocally that alimony payments
and child support would receive number-one priority in determining which debts
are repaid, would have given added protection to families dependent on this
income. Without this legislation, child support and alimony payments will
continue to rank seventh on the list of priority payments in a bankruptcy
proceeding while payments to bankruptcy attorneys continue to receive the
number-one priority. This is unfortunate and unfair. We think America’s women
and children deserve better.
"We appreciate the work done
by the bipartisan majority in both houses who have worked hard to lay the
groundwork that will lead to enactment of needed reforms of our bankruptcy laws.
We remain committed to supporting legislation that helps all American families,
and look forward to building on the progress made during this Congress. There is
clear evidence of very strong support for meaningful bankruptcy reform in both
the House and in the Senate. That commitment, coupled with the priority status
the leadership has assigned this issue, gives us confidence that reform will be
enacted early next year."
The National Consumer Bankruptcy
Coalition is comprised of the following
organizations:
American Bankers Association
American
Financial Services Association
America’s Community Bankers
Bankruptcy
Issues Council
Coalition for Financial Responsibility
Consumer Bankers
Association
Credit Union National Association
Independent Bankers
Association of America
National Retail Federation
U.S. Chamber of
Commerce
Representatives from the
National Conference of Bankruptcy Judges and the Consumer Federation of America
declined comment. Additional statements will be added as they are made
available.