U.S. Chamber urges the Senate to support passage of S. 256, "The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 without amendment."

February 28, 2005

TO MEMBERS OF THE U.S. SENATE:

The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses of every size, sector, and region, urges you to support passage of S. 256, “The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 without amendment.”

“The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” is an important piece of bipartisan legislation has been passed numerous times by the U.S. Senate with wide bipartisan margins will end the abuse and restore personal responsibility to the United States’ bankruptcy system. S. 256 closes loopholes in current law that encourage fraudulent debtors to take advantage of the system and avoid paying their debts while passing them on to everyday Americans who pay for every bankruptcy of convenience through higher prices and interest rates.

S. 256 will protect responsible borrowers from paying for bankruptcy abuse by providing a fair needs-based system that would only affect that small percentage of bankruptcy filers who abuse the system, but still have the means to repay a significant portion of their debts. The bill also allows for a bankruptcy judge to consider any special circumstances such as high medical bills or divorce, the leading causes of bankruptcy, to ensure that every debtor is treated fairly.

Moreover, under this bill women and children come first. Current law dictates that child support and alimony payments rank seventh on the priority lists of payments, after such things as bankruptcy attorneys’ fees. Provisions in the bill give long-overdue priority to child support and alimony payments in a bankruptcy proceeding and stop abuse of the automatic stay to prevent the collection and payment of child support.

Additionally, the U.S. Chamber urges you to oppose all weakening amendments including any clinic-access poison pill amendment.

The clinic amendment claims to make debts incurred in connection with violations of the Freedom of Access to Clinic Entrances Act (FACE) non-dischargeable in bankruptcy proceedings. Current law, however, already prevents such violations from being dischargeable in bankruptcy proceedings. The amendment is a poison pill and its inclusion in the bankruptcy bill would simply prevent the enactment of the legislation, depriving consumers of the benefits of bankruptcy reform, and providing no benefit to the providers or users of clinics whom the amendment is ostensibly designed to protect.

Few, if any, bills have undergone such an extensive process of committee hearings and amendments accompanied by repeated and overwhelming bipartisan floor votes. After eight years, it is time to enact this legislation.

American voters want bankruptcy made available to those that need it, but just as clearly prefer that those who can afford to pay back some of their debt do so. S.256 achieves this balance through a series of hard fought compromises designed to adjust to changing conditions while always providing prompt relief to those who need it.

S. 256 is a priority for the members of the U.S. Chamber of Commerce. Due to the importance of this legislation for the business community and consumers, we may consider votes on, or in relation to, S. 256 as key votes in the Chamber’s annual How They Voted ratings.

Sincerely,

R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce