Bankruptcy Bill Given Another Chance
Proving that it has more lives than perhaps any bill in recent memory, the House Judiciary Committee will consider bankruptcy overhaul legislation Wednesday.
For the sixth time in about as many years, Congress will try to pass legislation forcing more debtors to file under the less-forgiving provisions of Chapter 13 of the Bankruptcy Code, rather than Chapter 7, which discharges all debts once assets have been liquidated.
Debtors who earn more than their state’s median family income and who can afford to repay over five years at least 25 percent of unsecured obligations or at least $6,000, whichever is higher, would be prohibited from filing under Chapter 7.
With one big exception, the committee will mark up a bill identical to last year’s conference report, which was stalled by conservatives who objected to a provision that would have prevented abortion protestors from declaring bankruptcy to avoid paying court-imposed fines.
That amendment, sponsored by Sen. Charles Schumer (D-N.Y.), will not be included, committee spokesman Jeffrey Lungren said.
He expects the bill to reach the House floor by the end of the month.
While unsure what the Senate will do, Lungren said supporters are optimistic it will pass this year now that Republicans control both chambers.
President Bush backs the bill — widely endorsed by the financial services industry but reviled by consumer groups — as well.
Although the measure’s biggest Senate critic, the late Paul Wellstone (D-Minn.), is no longer in the chamber, a free ride is far from certain. Sen. Russ Feingold (D-Wis.) also has been a vocal opponent and threatened to block a vote on last year’s conference report.
Senate Minority Leader Thomas Daschle (D-S.D.) had urged Democrats to pass the bill last year, saying that the legislation could only get worse if Congress waited until this year.