[Congressional Record Volume 144, Number 117 (Tuesday, September 8, 1998)]
[Senate]
[Pages S9951-S9955]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CONSUMER BANKRUPTCY REFORM ACT

  Mr. HATCH. Mr. President, I rise today to again express my 
disappointment in the refusal of Members on the other side of the aisle 
to allow the Senate to proceed to S. 1301, the Consumer Bankruptcy 
Reform Act of 1998.
  This is a very important piece of legislation, and it will be an 
enormous disservice to the American people if we fail to act on it this 
year. We all know the time is short and the schedule is very crowded in 
these last few weeks of the session. I just hope that, when the time 
comes, my colleagues on the other side will vote for cloture on the 
motion to proceed tomorrow and provide the Senate a fair chance to 
debate this much-needed legislation. In fact, I hope that they will 
waive their filibuster on the motion to proceed and will invoke cloture 
on the bill itself, if that is needed.
  In recent years, personal bankruptcy filings have reached epidemic 
proportions in the United States. We simply cannot afford to continue 
down this path because excessive bankruptcy filings harm every one of 
us in America. Consumer bankruptcy ends up costing Americans almost $40 
billion a year, or roughly $400 per household in this country. The 
negative repercussions associated with consumer bankruptcy go far 
beyond the debts owed to credit card companies and big businesses.
  The reality is, contrary to what the critics of reform would lead us 
to believe, this issue profoundly impacts the average American. 
Bankruptcies end up harming small business owners, senior citizens who 
rely on rental income to supplement their retirements, and of course 
members of credit unions. Even the person who files for bankruptcy can 
end up being hurt. Some filers, victims of so-called ``bankruptcy 
mills,'' are neither apprised of their options nor informed of the 
consequences of a bankruptcy filing. Ultimately, they suffer the 
consequences of having filed, when a better alternative may have been 
available to them.
  This legislation is guided by two main principles: No. 1, restoring 
personal responsibility in the bankruptcy system; and, No. 2, ensuring 
adequate and effective protection for consumers.
  There are individuals who can repay some of what they owe but, 
instead, choose to use--rather, ``abuse''--the current bankruptcy 
system or laws to avoid doing so. The bankruptcy laws need to be 
reformed to prevent this from occurring. S. 1301 does this, while 
delicately safeguarding the bankruptcy system so that it can provide a 
``fresh start'' to those who truly need it.
  I note that according to statistics from the American Bankruptcy 
Institute, most States in this Union have seen a troubling rise in 
bankruptcy filings. This is at a time when our economy has been doing 
extremely well. While we must preserve bankruptcy for those who need 
it, as legislators we must recognize that there are some unscrupulous 
individuals who are able to repay some of what they owe but still use 
the current bankruptcy laws to avoid doing so. In fact, to go one step 
further, there are some people who can pay all of what they owe but opt 
out through the bankruptcy system because of current loopholes in the 
law itself.

[[Page S9952]]

  This balanced legislation deserves to be considered. It is time for 
the Senate to act on this legislation. We should not derail the fair 
and balanced reforms proposed by this bill due to petty, partisan 
politics. I hope that my colleagues on the other side of the aisle will 
vote to allow the Senate to proceed to S. 1301 tomorrow. Furthermore, I 
hope once we proceed to the bankruptcy legislation, they will not 
prevent its passage by attempts to offer extraneous, politically 
motivated amendments, all of which we are used to at this time of the 
year but which I hope will not be the case on this particular bill, as 
important as it is. There will be no greater failure to discharge our 
duty as Senators if this legislation is held hostage for petty 
political purposes or the petty political politics of the few.
  It is time to debate this bill, debate any relevant amendments, and 
it is time to vote on it. In the interests of all Americans and the 
future of our economy, we need to end these partisan efforts to delay 
consideration of this bankruptcy reform legislation. It is time to 
fulfill our commitment to the American people and end the abuse of the 
bankruptcy system and its attendant $400 tax on every American family.
  Finally, I want to pay particular tribute to the distinguished 
Senator from Iowa who has handled this matter through the Subcommittee 
on the Courts and Administrative Oversight. He has brought it through 
the full committee and on to the floor of the Senate, with the help of 
some of the rest of us, but he has done a particularly good job on this 
bill.
  Yes, there are things that perhaps need to be corrected and might 
need to be changed. Both Senator Grassley and I have been open to 
changes and good ideas to improve this bill. And when and if we finally 
get to debate this bill, we will remain open to new ideas. But the fact 
of the matter is, it is very difficult to get a bill of this magnitude 
through without listening to everybody and paying attention to 
everybody's ideas. I think the distinguished Senator from Iowa has done 
an excellent job in doing exactly that. I am very proud of the work he 
has done. It is just typical of his service here in the Senate that he 
not only grabs the bull by the horns, but he gets it done and he does 
the things that really have to be done. He is a very valued member of 
the Judiciary Committee, and is certainly valued by me, personally. I 
just want him to know how much I appreciate the work he has done on 
this legislation.
  There are others, as well, including the distinguished Senator from 
Illinois, on other side of the floor. I hope he will counsel the people 
on his side of the floor to quit playing games with this important 
bill. He has worked very hard on this bill as well and deserves a lot 
of credit for how far we have come on this. I hope that with the 
leadership of these two fine Senators, Members on both sides of the 
aisle will realize how important this legislation truly is. If we can 
get this up through cloture, I have no doubt this will pass 
overwhelmingly on the floor because it is that important. It is that 
well done. It has the kind of backing that really it needs from the 
people at large in the country, on all sides of the spectrum. It is the 
type of legislation where literally all of us can go home and say we 
did the right thing.
  There is no question that we have to go to conference should we pass 
this bill. Hopefully, through that process, we can perfect both the 
House bill and this bill even more than we have right now. But the fact 
is, these leaders on the committee have done a very, very good job in 
getting it to this point, and I compliment them for it.
  I yield the floor.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The distinguished Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume. I thank the Senator from Utah, the chairman of the Senate 
Judiciary Committee, not only for the kind remarks he made about my 
participation in this process on the bankruptcy law, but also to say 
that it would not have been possible to get it out of the Judiciary 
Committee without some compromises, which he helped shape in the 
process, and also in making it a better bill as well. So this is a 
cooperative effort not only in the subcommittee, but also at the full 
committee level. The 16-2 vote by which the bill was voted out of 
committee, I think, speaks better than anything I can say or even that 
the Senator from Utah can say about how badly needed this legislation 
is and what a significant compromise it is in order to get that type of 
a margin out of the Judiciary Committee, which the chairman has already 
referred to as a committee that can be very controversially oriented 
from time to time. This is a piece of legislation that speaks to how 
cooperative that committee can be when the need calls for it to be.
  Mr. President, as I recall, we are in a situation on this floor where 
there was an objection to the bill coming up. So the distinguished 
Senate majority leader had to move that this bill be brought up. So we 
have a debate going on now on a motion to proceed that is fairly 
uncharacteristic of most processes of moving legislation on the floor 
of the Senate. So I want to use this opportunity that we have of the 
Senate deciding whether or not we should even debate the merits of this 
bill to once again give reasons to my colleagues why we should move 
beyond the motion to proceed to actual consideration of this 
legislation. We will have that vote, as I am going to refer to in a 
minute, hopefully tomorrow.
  So I rise today to speak again on the importance and the need--the 
very justified need--for fundamental bankruptcy reform. Last week, as I 
stated, a member of the minority party objected to allowing the Senate 
to consider this bill that was voted out of committee 16-2--even to 
debate it. Tomorrow, we are set to vote on whether to proceed to the 
bankruptcy bill. If we don't have a positive vote on this, then 
bankruptcy will not be on the agenda this session. It is badly needed 
legislation. It would be a sad consequence of that vote to not be able 
to move forward.
  In my view, the fact that there is an objection to even considering 
bankruptcy reform shows just how scared and how reactionary the 
opponents of bankruptcy reform are. The opponents of reform know that 
the Consumer Bankruptcy Reform Act will pass overwhelmingly if allowed 
to come to a straight vote. I think hearing the distinguished chairman 
of the Judiciary Committee, Chairman Hatch, say that just a few minutes 
ago fortifies what I have just said.
  The opponents of reform know that the polls are absolutely clear on a 
broad public support for bankruptcy reform. There is no way that a 
minority of the Senate can fool 68 percent of the people nationally who 
say that we need bankruptcy reform. And there is no way that a minority 
of the Senate can fool 78 percent of the people of my State of Iowa who 
were surveyed in a poll on the need and their support for bankruptcy 
reform. So the American people know that our bankruptcy system is, in 
fact, out of control. Obviously, the people know that it is out of 
control much more than even a small minority of the minority in this 
body know it is out of control. If they know it is out of control and 
badly in need of reform, they would let us proceed to this bill. So I 
hope that Congress will respond to what the people want and move 
forward to consider and pass--pass overwhelmingly, as it did out of 
committee--the Consumer Bankruptcy Reform Act. That is what 
representative democracy is all about.

  As I said on Thursday of last week when we were set to take up the 
bankruptcy reform bill, the Consumer Bankruptcy Reform bill is a 
bipartisan piece of legislation which passed out of the Judiciary 
Committee by an overwhelming vote of 16-2. The goal of the bill is 
simple and it is important: to restore personal responsibility to our 
bankruptcy law, and to put an end to the many bankruptcies of 
convenience which are filed every year in the United States.
  In recent years, the number of bankruptcies has, in fact, very much 
skyrocketed. Every year since 1994, records have been broken in terms 
of the number of bankruptcies filed. Now we are at the point that we 
had 1.4 million personal bankruptcies in 1997. So if this trend 
continues, Mr. President, we must all shudder to think about the harm 
to our economy and to the moral fabric of our Nation--to the economy, 
with $40 billion of costs. There is no free lunch when it comes to 
bankruptcy. There might be for the person

[[Page S9953]]

that declares bankruptcy, but as we know, in our society, somebody 
pays; $40 billion is being paid by somebody in America and that figures 
out to about $400 per family of four in America per year. Just think of 
that. You, Mr. President, could be spending $400 less for your goods 
and services if we did not have this high number of bankruptcies that 
we have.
  But more important, what does it do to the moral fabric of our great 
country when, somehow, you can live high on the hog and not worry about 
who is going to pay for it. You don't have to; you go into bankruptcy 
and somebody else pays for it. There ought to be, and is, a rule for 
America which is that we all ought to be personally responsible for the 
actions we take. That is applicable not just to moral issues of family 
and marriage, but it also involves the economic world we are in as 
well, and that is, in fact, if you enjoy something, you want to pay for 
it.
  The interesting and alarming thing is that this unprecedented 
increase in bankruptcy filings comes at a time when our economy has 
been generally healthy. Disposable income is up, unemployment is low, 
and interest rates are low. There is something that just doesn't make 
sense about this situation. Common sense and basic economics say that 
when the economy flourishes, bankruptcies should not be so high.
  I had an opportunity over the weekend to look at an old U.S. News and 
World Report from 1991 with the predictions of the decade of the 1990s 
coming up. At the time that magazine came out, we were in the middle of 
the recession of 1990. That recession was caused by one of the big tax 
increases that President Bush proposed. It wasn't quite as big as the 
tax increase that President Clinton got through in 1993, which was the 
biggest tax increase in the history of the world, but that tax increase 
had a detrimental impact on the economy and we were in a recession--
recession that, thank God, we have had years of recovery since without 
going into another recession.

  But in that magazine it made light of the fact that there was a 
135,000 increase in personal bankruptcies that year because of the 
recession. That is when we had the number of personal bankruptcies well 
below 800,000 at that particular time.
  Let's just think. There is going to be a recession around the corner 
someday, hopefully not for 3 or 4 years down the road, as the economy 
is going fairly strong. But it could be happening within a year from 
now if things in Southeast Asia and Russia don't turn around, maybe, 
and as the stock market is also indicating. We would be thinking in 
terms of half a million to 1 million bankruptcies just because of the 
economy turning south, if we are concerned about 135,000 increases in 
bankruptcies in the year 1990 as an example.
  It is an unprecedented time in our economy. Why is it an 
unprecedented time, then, for the number of personal bankruptcy 
filings? I don't know. I have said how it could be related to the 
bank's sending out so many credit cards for people to be invited into 
more debt. It could be because the Federal Government had 30 years of 
deficit spending. Hopefully, we have that behind us now with this year 
paying down $63 billion on the national debt for the first time in 30 
years. It could be because the bankruptcy bar is very loose in their 
advice, or the lack of advice, on whether people ought to go into 
bankruptcy or not. There doesn't seem to be the shame that is connected 
with bankruptcy as there used to be. There is probably a lot of other 
reasons. At least we have those reasons to consider and those reasons 
to deal with. Another reason is the 1978 bankruptcy law that made it 
possible to get into bankruptcy. Hopefully, we have that turned around 
with the passage of this legislation as well.
  In the opinion of this Senator, of course, one of the main bankruptcy 
crises is, as I just stated, the overly liberal bankruptcy law of 1978. 
Remember, since 1978 I have had hundreds of people tell me it is too 
easy to get into bankruptcy. And it shouldn't be that easy. I have not 
had one person tell me that it ought to be easier to get into 
bankruptcy. And I even have had some people tell me who have been 
through bankruptcy that it is too easy to get into bankruptcy. That 
sort of attitude of the public is what is behind the 68 percent 
nationally and the 78 percent of the people in my State in polls who 
say the bankruptcy laws should be reformed.
  Quite simply, current law discourages personal responsibility. I want 
to say that again. Current law actually discourages personal 
responsibility. As a result, bankruptcy has become a first option, not 
as a last resort for many with financial difficulties.
  Bankruptcy is seen as a quick and easy way of avoiding debt. 
Bankruptcy is now a matter of convenience rather than a matter of 
necessity. The moral stigma that used to be associated with not being 
able to pay your debt is now almost completely gone. I am not saying 
that bankruptcy law serves no purpose. On the contrary, the ability to 
have a fresh start--or you might say it is a principle of our 
bankruptcy law that there are some people who are entitled to a fresh 
start--it is a vital part of this American system. It is the right 
thing to do in some instances. But what is important is that 
we structure our laws so that bankruptcy is available to those who 
truly need protection--people who maybe because of natural disaster, 
maybe because of a catastrophic illness in their family, maybe because 
of even divorce--there are several reasons that have been considered 
legitimate. But we want to make sure that this process is not available 
to those who want to abuse the system and find an easy irresponsible 
way out.

  The bill that we will hopefully get to consider after our cloture 
vote tomorrow strikes a balance between personal responsibility on the 
one hand and giving people an opportunity to get a fresh start who 
legitimately deserve it on the other hand. That is why the Judiciary 
Committee, which can be very partisan at times, approved this bill by a 
vote of 16 to 2. Mr. President, I will have more to say on the problems 
with our bankruptcy system if and when we get to consider the 
bankruptcy bill.
  I want to inform my colleagues about the deceptive practices of 
bankruptcy lawyers who dupe unwary consumers into declaring 
bankruptcies. The practices of bankruptcy lawyers have become 
underhanded so much that the Federal Trade Commission has issued an 
alert on that process. And in the process of issuing that order, they 
criticized the bankruptcy bar.
  If and when we get to consider the bill, I want to talk more about 
how my bill enhances collection of child support. The National District 
Attorneys Association, as well as numerous other organizations which 
collect child support, have written to me to praise this bill--S. 
1301--and the innovations in the bill for protecting child support.
  Mr. President, supporting this bill is the right thing to do. 
Approving a vote tomorrow to move to this bill so it can actually be 
considered is the right thing to do, because the American people are 
sick and tired of the avoidance of personal responsibility--not only in 
the case of bankruptcy but so many other areas. It is one we can do 
something about right now through the passage of this legislation.
  The other body across the Hill has already passed an even more 
sweeping version of bankruptcy reform, and they have done it by a veto-
proof margin. But here we are right now on the floor of the U.S. Senate 
fending off a filibuster against bankruptcy reform. After the vote 
tomorrow, if we win and can actually go to the debate of S. 1301, I 
expect maybe even a second filibuster. I don't think these desperation 
tactics work, and particularly in the case of something that is so 
badly needed as bankruptcy reform.
  It is interesting how the same people who criticize this Congress for 
doing anything are the same ones who are blocking positive bankruptcy 
reform. I have talked with many of my colleagues on the other side of 
the aisle. I know there is a real desire to see bankruptcy reform 
happen this year. That is why the Consumer Bankruptcy Reform Act 
received such broad bipartisan support in the Judiciary Committee. 
Quite simply, it is time to restore the sense of personal 
responsibility that we Americans are famous for to our bankruptcy law.
  I urge my colleagues to support the motion to proceed on S. 1301, and 
then to support S. 1301 and move to a bill that is going to bring new 
penalties for abusive bill collectors; it is going to

[[Page S9954]]

bring new penalties for illegal repossessions; it is going to bring 
fines for inflated creditor claims; and it is going to bring penalties 
for deceptive credit practices.
  It seems to me that is a bill that not only will bring about 
bankruptcy reform so that bankruptcy will be used only when people are 
really entitled to a fresh start, fitting into a pattern that we have 
had in our bankruptcy laws between 1998 and 1978--it has only been in 
the last 20 years that this has turned bad--but to discourage 
bankruptcy, to reimpose personal responsibility on debt, and that we 
also do some things that even give some consumer protection in the 
process. I only stress the new consumer protections to make the point 
that we are going to have a very balanced piece of legislation pass 
this Senate, if we get a chance to vote on it.
  I yield the floor.
  Mr. SESSIONS addressed the Chair.
  The PRESIDING OFFICER (Mr. Grassley). The distinguished Senator from 
Alabama is recognized.
  Mr. SESSIONS. Mr. President, I would like to join Senator Hatch in 
expressing my admiration and respect for Senator Grassley and the 
members of his committee who have worked hard on this bankruptcy reform 
legislation. It has obtained almost universal support. It passed the 
committee 16 to 2, and it reflects a good step in our public policy.
  As Senator Grassley says, the current liberalized bankruptcy law 
discourages personal responsibility, that is, it makes it easy and even 
encourages persons to avoid their responsibility. That is not good. A 
Harvard professor has written a book which talked about how during the 
first 150 years of this Nation's existence every law that came up for 
consideration was judged on the basis of whether it made our people 
more responsible and better citizens. I think that is a goal we have 
lost sight of in recent years. What we need to do is make sure our 
legislation sets standards that call people to their highest and best 
ideals and not dumbing them down and encouraging them to cop out, to 
take the easy way out, to avoid their debts when there is no real 
justification for it.
  Most people may not understand, but a person making $70,000 with 
$30,000 in debts can walk into a bankruptcy court in America, at any 
place, at any time, and file for bankruptcy. Even though he would be 
perfectly able to pay off those debts, he can wipe them all out. This 
is true even if, just a few months before, he or she had signed a 
promissory note to pay those debts. This behavior vitiates contracts, 
and it vitiates responsibility.
  So I think, based on the fact that we have had a doubling of 
bankruptcy filings in the last decade and we have seen a 60 percent 
increase in bankruptcy filings since 1995, we do have a problem in this 
country. This is not driven by the economy, because we are in good 
economic times. In 1997, however, we now know that $40 billion in 
consumer debt was erased by bankruptcy filings in this country.
  Where does that debt go? Who pays that debt? What happens to it? It 
is passed on to the other American citizens who are in debt but who pay 
their debts, who pay their credit card bills, who pay their bank notes. 
They have to pay higher interest rates, to the tune of $400 per family 
per year, to balance out some of these people who are filing for 
bankruptcy but do not deserve it. Many people, a majority of those 
filing, do not abuse bankruptcy. But a significant number are abusing 
the bankruptcy laws, and we ought to do something about it.
  There was a recent article written by former Secretary of the 
Treasury Lloyd Bentsen, former Democratic Vice Presidential candidate, 
and former chairman of the Senate Finance Committee. This is what he 
said:

       With growing frequency, bankruptcy is being treated as a 
     first choice rather than a last resort, as a matter of 
     convenience rather than necessity.

  He goes on to note:

       A rising tide of bankruptcies will sink all ships and hurt 
     those who need credit the most, those who have to borrow 
     money.

  People do not understand--and many in this body do not recognize--
that many who have done well, such as a family making $30-$40-$50,000 a 
year, will have debts. When they have a car payment that comes up, if 
they have an $800 balance on their credit card, those interest points 
make a difference to them--whether they pay 15 percent or 18 percent or 
19 percent interest.
  As former Secretary of the Treasury under President Clinton, Senator 
Bentsen, said:

       In the United States, we believe that through hard work 
     anyone can become a success. America's bankruptcy laws 
     reflect a fundamental element of our Nation's entrepreneurial 
     spirit. Their intent is to ensure a fresh start for those who 
     try and fail, and they form an important thread in our social 
     safety net. But when some people systematically abuse the 
     system at great expense to the rest of the population, 
     twisting the fresh start into a free ride, Congress must step 
     in and tighten up the law to protect those who unfairly bear 
     the cost. When it comes to bankruptcies of convenience, this 
     time has come.

  So I agree; it is a bipartisan issue. Senator Grassley has worked 
diligently to gain the broadest possible support. This bill came out of 
the Senate Judiciary Committee 16 to 2. A virtually unanimous vote on a 
bill of this kind is unusual and should be noted.
  Why is it necessary? I want to mention a few things that are in the 
bill, and then I want to comment on the unusual and unfortunate 
circumstance we are in now in which the minority party is attempting to 
block even consideration of the bill that so many of their own members 
have already supported in committee. They in fact filibustered the bill 
before it could even come to the floor. People say this is a do-nothing 
Congress. Maybe they are trying to make it so. This is a good bill. It 
has been worked on for several years. It has been improved and refined. 
It has very broad support, and we ought to pass it.
  These are some of the things it does: It allows creditors, those who 
are owed money, and panel trustees to participate in the review of the 
debtor's decision to file a chapter 7 instead of a chapter 13.
  Most people do not realize that when you go to file bankruptcy, you 
have two choices, if you are a normal consumer who is in debt. You can 
file under chapter 7--wipe out all your debts and not have to pay 
anything. Your money goes into a pot and is divided up on a 
proportional basis to creditors, and you walk away free and clear. This 
permits a fresh start, which is a great American tradition. We are not 
trying to eliminate that at all.
  But there is another tradition, too. That is the tradition of chapter 
13, which in fact was first created in my home State of Alabama, in 
Birmingham, and it is still a very popular alternative there. It 
provides the option for a debtor who wants to try to pay back his debt 
to do so. The Court approves his plan, and he pays a certain amount of 
money into the chapter 13 fund, and it is distributed to his debtors. 
They give up the interest rates that they have been charging on it, and 
at least they get something back out of it. And this person is able to 
be discharged without having filed for bankruptcy because the debts 
have, in fact, been honored.
  This is a procedure that I think ought to be encouraged. What we are 
finding is that in some areas of the country almost nobody files 
chapter 13. But it is a high filing issue in Alabama. People want to 
pay their debts, and they are taking this option.
  So what this bill says is that if a person has $100,000 per year 
income and he only owes $30,000 and he wants to file chapter 7, this 
will give the creditors a chance to object and say, ``Judge, we think 
you ought to review this. He doesn't need this bankruptcy. Why should 
he be able to walk away from his debts when people who are making 
$30,000, have three kids, and are trying to get by by the skin of their 
teeth are paying their debts? Why doesn't he pay his?''
  I think that is fundamental, and we need to get away from this 
automatic deal in which the filer has total power to choose whether or 
not he files under 7 or 13.
  The bill also requires consumers to receive information concerning 
credit counseling before filing. Many people do not know that there are 
tremendous credit counseling centers in almost every community in 
America. These persons help the families. This differs from when a 
debtor goes in to see a bankruptcy lawyer who simply has his secretary 
asks the person to fill out a form. The debtor may not even see the 
lawyer; the lawyer has probably hundreds of these cases. The secretary 
has

[[Page S9955]]

you fill out a form, and he files a bankruptcy, and he hardly even 
talks to the client. That too often happens.
  In credit counseling, the person sits down with the credit counselor. 
They go over their income. They talk about how they can pay that off. 
Maybe the banks or the credit card companies would reduce their 
interest rates if the person could make regular payments and not go 
into bankruptcy. They help them deal with problems in families such as 
gambling addiction. I have been talked to credit counseling people 
across this country. They are telling me that gambling is a big factor 
driving bankruptcy filings. Maybe Gamblers Anonymous would be the right 
thing for them.
  Maybe there is a mental health problem, depression in the family or 
other things that these people who are not sophisticated in finance did 
not know would be available to them to help them overcome their debt 
problem. So I think that would be a great thing. It is not going to 
eliminate huge numbers of filings, but I assure you, I believe we will 
have a number of families helped by this personally, maybe marriages 
saved. And it will help them develop a plan to pay off this debt and 
avoid the stigma of bankruptcy. It would be a good thing and is an 
important part of this bill. I am confident of this because on my study 
of this issue. I offered an amendment to this bill which was adopted.
  The bill also requires, during bankruptcy, that people who do declare 
bankruptcy participate in a debt management class. We found in some 
districts as much as 40 percent of the bankruptcy filings are by people 
who filed bankruptcy before. We need to educate them on some basic 
principles of how to manage their money and hopefully they will not 
come back again and other debts will not be abrogated.
  This legislation would require debtors to provide more financial 
information, including tax returns. It provides for random audits 
requiring referrals for possible criminal prosecution. I was a Federal 
prosecutor for 15 years and we formed a bankruptcy fraud task force to 
deal with this problem. The truth is that there are very, very few 
bankruptcy fraud prosecutions in America. This is Federal court. We 
expect people to be truthful in what they submit, and those who are not 
honest must suffer criminal sanctions, or the word will get out among 
the bankruptcy lawyers that it doesn't make any difference and that 
nothing will ever happen to you if you are not candid and truthful in 
filling out your statements.
  It also allows creditors to represent themselves; that is, people to 
whom money is owed can go down to bankruptcy court to represent 
themselves without a lawyer. The Presiding Officer here today, Senator 
Grassley, felt very strongly about that provision. And the truth is, it 
is a key issue. If you have a $500 debt owed to the garage, the 
furniture store, the jewelry store, or whatever, you may spend that 
much on a lawyer to go down there and represent you. What kind of 
relief is that, if you cannot go yourself, if you have to spend more on 
collection than what you collect? Senator Grassley has been very 
steadfast in believing that we need to change that situation. It is a 
good step in this bill, because most of these matters are not that 
complicated. All you really need is a verified claim from the person 
who is owed the debt.
  So I believe this bill represents a major step forward. It is a bill 
that seeks to lift our standards as Americans to encourage people to 
pay their debts if they are able to, to train and educate them so they 
will not get in financial trouble in the future. That is something we 
ought to do, to perhaps reduce this ever-increasing spiral of 
bankruptcy filings.
  It is a good bill. I am disappointed, shocked, and really stunned 
that we are now at a point where we cannot even get the bill up for 
debate and we have to deal with a filibuster and we are going to have 
to have a cloture vote on whether or not we even consider this 
legislation. It is not controversial. It is good legislation. It is 
carefully crafted. It is good for America. It is good public policy. It 
calls people to a higher standard, eliminates abuse and fraud and 
criminality, and ought to be something that will go through this 
Congress with the most minimal objections.
  I do not know what politics are behind the objection here. Sometimes 
I think it is just a desire to keep this Congress from passing anything 
and utilizing every rule and technical objection that can be made to 
frustrate the normal working through of good legislation. At any rate, 
I believe we will prevail on this motion, we will get the bill up, and 
I believe it will pass in this chamber as it did in the House, and then 
we will have done something good in this Congress: We will have 
reformed a bankruptcy system that is out of control.
  The PRESIDING OFFICER. The Chair recognizes the Senator from 
Missouri.

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