Senate passes bankruptcy bill

Discussion in 'Credit Talk' started by Alex, Mar 15, 2001.

  1. Alex

    Alex Well-Known Member

    The Senate voted and passed a bill Thursday to make it harder for people to erase their debts in bankruptcy courts.

    The Senate debated the bill for two weeks, but few of the issues were new to it. The banking, credit card and retail credit industries have spent millions of dollars in campaign contributions and lobbying activities on behalf of it over the past three years.

    Consumer groups and unions have been aggressive in opposing it, contending that the changes in bankruptcy law will take away an important means of relief for families hit by job losses. Former President Clinton vetoed last year's version, saying it would hurt ordinary people and working families.

    The legislation applies a new standard for determining whether people filing for bankruptcy should be forced to repay their debts under a court-approved reorganization plan rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25 percent of the debt over five years, a reorganization plan generally would be required.

    Some proponents of the legislation have insisted that the real issue is not money but fundamental values such as fairness and taking responsibility for one's actions.

    Personal bankruptcies in the United States reached a record 1.4 million in 1998, up more than 300 percent since 1980. The total declined to about 1.3 million in 1999 and 1.2 million last year.

    The above is info from an article in the New York Times, you can read the full article on their website at


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