U.S. Chamber Calls for Action on Bankruptcy Reform
WASHINGTON, D.C.-The United States Chamber of Commerce applauded today's House passage of bankruptcy reform legislation (306-108) that would require wealthy debtors to repay their debts and urged the Senate to follow suit.
"More Americans file for bankruptcy than graduate college each year," said Thomas Donohue, Chamber president and CEO. "Without congressional action, losses from bankruptcy abuses will continue to break the banks, and backs, of the nation's small businesses and retailers, which work with slim profit margins and an even smaller margin for error."
The Bankruptcy Reform Act of 2001, introduced in the House by Rep. George Gekas (R-PA-17) and in the Senate by Sen. Charles Grassley (R-IA), is identical to legislation that Congress overwhelmingly passed in December but President Clinton vetoed. The legislation would end the present practice of wealthy debtors shielding assets to escape their bills, while preserving access to bankruptcy for legitimate filers.
"Congress needs to send a message to wealthy debtors that it's time to pay their bills," said Donohue. "This legislation protects consumers who need to file for bankruptcy, while at the same time ensuring businesses don't foot the bill for filing abuses."
The number of bankruptcies has skyrocketed 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.
The legislation would require 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 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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