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Summarized by Rosemary Pollock
Hatch Champions Bill To Make Bankruptcy Less Appealing
Austin TX American Statesman 13May00 N2
By Marcy Gordon: Associated Press
WASHINGTON, DC -- Judiciary Committee Chairman Orrin Hatch, R-Utah,
is championing a proposal to stem the rise in bankruptcy abuse which
in recent years reached a record 1.4 million in 1998, up more than
300 percent since 1980. The amended legislation would make it harder
for people to erase debts through bankruptcy. Bills H.R. 833 in the
House and S.945 in the Senate have raised considerable protest from
consumer advocates, unions, women's groups and religious leaders.
In a letter to senior lawmakers, Jack Lew , White House budget director
wrote that the administration had "serious concerns." "The president
supports balanced consumer bankruptcy reform that would encourage
responsibility and reduce abuses of the bankruptcy system on the part of
debtors and creditors alike," Lew said. "He believes that we can eliminate
abuse without hurting those forced to turn to bankruptcy."
Lew's letter did not directly address Hatch's new proposal but pointed out
that bankruptcy legislation must contain "appropriate safeguards against
coercive creditor practices that compel debtors to forgo their rights and
that disadvantage more scrupulous creditors."
Sen. Paul Sarbanes of Maryland, the Senate Banking Committee's senior
Democrat, is accusing the proposal of "allowing unfettered collection
activities." The amendment would exempt collectors from the debt collection
practices law that involves checks that have been outstanding for more than
30 days. Debt collectors could phone people at any time of the day or night
and charge them high fees if they fail to make good on bounced checks,
according to Hatch's plan.
The House and Senate bills, both passed by veto-margins, would apply new
standards to determining whether people filing for bankruptcy should be
forced to repay their debts under court-approved reorganization plan instead
of having them dissolved.
The House and Senate are trying to meld the two bills into one measure
before it is sent to President Clinton. Critics say the legislation would
hurt people who have suffered financial misfortune as a result of losing
their jobs, getting divorced or huge medical expenses.
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