ANTI-CONSUMER BANKRUPTCY “REFORM” BILL TO BE PUSHED THROUGH CONGRESS

March 5, 2002

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Legislation to make it tougher for people to dissolve their debts in bankruptcy court is moving again in Congress, the Associated Press reported. Rep. Christopher Cannon (R-Utah), chairman of a House Judiciary subcommittee, said at a hearing yesterday that Republican lawmakers leading the panel want to move quickly to draft and vote on a bill, the newswire reported. Rep. Mel Watt (D-N.C.) said he supports in principle changes in bankruptcy laws, but not the House legislation as written — which he said would create “a paupers’ bankruptcy court,” reported the newswire. Banks, credit card companies and retailers have pushed for the legislation since 1997.

Proponents of the legislation insist it is needed to stop the abuse of the bankruptcy system by people who can afford to repay their debts, an abuse they claim creates a hidden tax through higher interest rates passed on by consumer credit businesses and other charges, reported the newswire. Consumer and civil rights groups and unions oppose it, contending it is unfair to low-income working people and would remove a financial safety net for those who have lost their jobs or pile up medical bills, the Associated Press reported. House and Senate leaders, including Sen.Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee, have promised to put the legislation on a fast track. Sources said they expect the House to move its measure by April, according to CongressDaily.