U.S. Chamber Hails Senate Action on Bankruptcy Reform
WASHINGTON, D.C.-The United States Chamber of Commerce applauded Senate passage of bankruptcy reform legislation that would require wealthy debtors to repay their debts and urged President Bush to sign it.
"The number of bankruptcy filings has skyrocketed in recent years - more Americans file each year than graduate from college," said Thomas Donohue, Chamber president and CEO. "The Senate took a critical step today to prevent wealthy debtors from passing the tab for mountains of debt on to businesses and consumers."
The Bankruptcy Reform Act of 2001, similar to legislation that Congress overwhelmingly passed in December but President Clinton vetoed, would end the present practice of wealthy debtors shielding assets to escape their bills, while preserving access to bankruptcy for legitimate filers.
"People who can't afford to pay their debts have nothing to fear from bankruptcy reform, but those who can better start worrying," said Donohue. "Reform is long overdue to inject a sense of personal responsibility back into a system run amok."
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.
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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