BANKRUPTCY “REFORM” BILL SENT TO PRESIDENT

April 14, 2005

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WASHINGTON, April 14 /U.S. Newswire/ — House Speaker Dennis Hastert (R-Ill.) made the following remarks today at an enrollment ceremony after the House of Representatives passed the Bankruptcy Abuse Prevention and Consumer Protection Act by a vote of 302-126:

“Today, the United States House of Representatives passed legislation that puts our nation’s bankruptcy system on a path towards greater responsibility.

“It goes from being the abuse system for those hiding from debt to its original intention: a program that helps those in real financial straits manage their bills. This action, which we expect will soon be signed into law by President Bush, restores integrity in the system. It makes it harder for those who want to use bankruptcy as a scapegoat to avoid debts.

“We must stop abuse. Those who abuse the system make getting credit more expensive for everyone. Bankruptcy is for those who need help, not those who want to shift costs to other hard-working Americans.

“Those who are starting or expanding their small businesses rely on access to credit. When fraudulent bankruptcies drive up the cost of credit, fewer jobs can be created and fewer businesses can be grown.

This bill will help that problem and go a long way towards improving our economy and protecting jobs. Instead, only those who truly need to declare bankruptcy can do so. Debtors filing for bankruptcy should know there are severe consequences for trying to cheat the system and ultimately, cheat us all.

“Let me share just a few of the provisions that safeguard abuse while still helping consumers. A screening mechanism will identify debtors with the financial means to pay their financial obligations. Once these debtors are identified they’ll be forced to pay all pending debts. All debtors planning to file bankruptcy must first attend a credit counseling session. After filing, the debtor must complete an approved instructional course on personal financial management.

“This legislation is long overdue. It strikes a balance to help those who are truly struggling to clear their debts and get back on their feet without making bankruptcy an easy out.

“But with this passage, the United States Congress sends a firm and resounding message to those looking to game the system — the federal bankruptcy system will no longer be a shelter for abuse.”

© 2005 U.S. Newswire