U.S. Chamber Hails Senate Action on Bankruptcy

WASHINGTON, D.C. - The United States Chamber of Commerce hailed today's overwhelmingly bipartisan Senate vote (70-28) for bankruptcy reform legislation and urged President Clinton to abandon his veto threat.

"This legislation, which protects Americans who file for bankruptcy - and protects businesses from those who abuse the system to escape their debts - is vitally important to the economy," said Thomas Donohue, Chamber President and CEO. "Many small businesses and retailers work with slim profit margins and an even smaller margin for error and cannot absorb the loss abuses of the bankruptcy system."

The bill, the Bankruptcy Reform Act of 2000, would end the present practice of wealthy debtors escaping their bills, while preserving access to bankruptcy for those who truly need it. This is particularly important because the number of bankruptcies has sky-rocked from 348,000 in 1984 to over 1.4 million in 1999.

"Every American will still be able to get bankruptcy relief, while those with the highest incomes will be required to repay what they can afford," said Donohue. "Businesses will no longer have to swallow nearly $40 billion in bankruptcy losses - losses which can wipe out revenues, economic growth and job creation."

The legislation would require people with the ability to pay to file under "Chapter 13," where courts establish timely repayment plans for those able to repay a portion of their debts instead of "Chapter 7," which erases all debts. Current law encourages debtors to take advantage of numerous loopholes and avoid paying their debts.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region.

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