Buoyed by anticipated approval from President
Bush, legislation that would make it harder for people to erase
credit card and other debts in bankruptcy court passed the House on
The vote was 306-108, with the majority Republicans solidly
supporting the bipartisan bill and Democrats split. Momentum for
passage of the measure came despite new government data showing
that personal bankruptcies in this country have declined in recent
The legislation, which has been pushed by the banking and retail
credit industries and opposed by consumer groups and unions, is
expected to be signed by Bush if it gets through Congress. It was
passed overwhelmingly last year, then was vetoed in December by
then-President Clinton on grounds it hurt ordinary people and
working families who fall on hard times.
Supporters of the legislation, which would bring the most
sweeping overhaul of the bankruptcy laws in 20 years, contend it is
needed to stem a tide of bankruptcy filings and abuse of the court
system. They say bankruptcy abuse creates a hidden tax of about
$400 a year on each American family in the form of higher interest
rates passed on by consumer credit businesses and other charges.
The legislation "strikes the proper balance" between debtors
and creditors, Rep. Dave Weldon, R-Fla., said in House debate
Thursday before the vote. "It is a good bill and it protects
But Stephen Brobeck, executive director of the Consumer
Federation of America, complained this week that the measure would
force many people "into a virtual debtors' prison."
Brobeck cited new data by the Administrative Office of the U.S.
Courts showing that personal bankruptcy filings fell from a peak of
about 1.4 million in 1998 to 1.3 million in 1999 and to 1.2 million
Opponents of the legislation maintain it would hurt families hit
by job losses, catastrophic medical expenses or other unforeseeable
hardships that push them over the edge financially, especially amid
the economic slowdown that has made layoffs frequent.
"The American people should know that a debtor can live in a
mansion in Florida worth millions ... and not worry," said Rep.
William Delahunt, D-Mass. But, he added, "If you are barely making
it ... woe is you: Those credit card companies will be able to
chase you forever."
"Every fair-minded American should find this offensive and
unconscionable," Delahunt declared.
Foes also criticize what they say are aggressive credit card
solicitations through the mail, which reached 2.51 billion by the
end of last year's third quarter, according to industry figures.
Total credit extended on card accounts jumped 13 percent to $2.9
trillion in the third quarter of 2000 from a year earlier.
The Senate Judiciary Committee voted Wednesday, 10-8, to approve
parallel legislation and send it to the full Senate, which may vote
next week. Senate Democrats previously had blocked a Republican
effort to rush it through that chamber, where the two parties have
a 50-50 split.
In a related move Wednesday, the House overwhelmingly passed a
bill that would allow farmers filing for bankruptcy to continue to
receive special protection so they would not have to sell their