U.S. Chamber Applauds Advancement of Bankruptcy Reform

WASHINGTON, D.C. — The United States Chamber of Commerce today applauded House Judiciary Chairman James Sensenbrenner (R-WI) and House conferees for reaching an agreement on legislation that reforms our nation's bankruptcy laws and requires wealthy debtors to repay their debts.

"Reform to our nation's bankruptcy system is long overdue," said Bruce Josten, U.S. Chamber executive vice president. "It is vital to our economy to bring a sense of personal responsibility back into a seriously flawed system."

The Bankruptcy Reform Act ends the present practice of wealthy debtors shielding assets to escape their bills, while preserving access to bankruptcy protection for legitimate filers.

"People who can't afford to pay their debts have nothing to fear from bankruptcy reform, but those who can will no longer be able to shield their assets," said Josten. "The Senate must pass — and the president sign — the bill that will prevent wealthy debtors from passing the buck to business and consumers."

The number of bankruptcies has risen from 348,000 to 1.4 million over the last 15 years. Businesses swallow nearly $40 billion in bankruptcy losses each year, costing the average American family about $400 a year.

Today's action by the house conferees requires people with the ability to pay to file under Chapter 13, where courts establish timely repayment plans, instead of Chapter 7, which erases all debts. Current law encourages debtors to take advantage of numerous loopholes and avoid paying their debts.

The House conferees have made significant strides in moving toward a compromise with the Senate. The Senate conferees should follow suit and refrain from adding on non-bankruptcy related issues to the bill.

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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02-28