[Congressional Record Volume 144, Number 124 (Thursday, September 17, 1998)]
[Senate]
[Pages S10452-S10454]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 CONSUMER BANKRUPTCY REFORM ACT OF 1998

  The PRESIDING OFFICER (Mr. DeWine). The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 1301) to amend title 11, United States Code, to 
     provide for consumer bankruptcy protection, and for other 
     purposes.

  Pending:

       Lott (for Grassley/Hatch) amendment No. 3559, in the nature 
     of a substitute.

  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.


                Amendment No. 3595 to Amendment No. 3559

 (Purpose: To provide for dismissal of a case when a debtor abuses the 
                   provisions of the Bankruptcy Code)

  Mr. GRASSLEY. Mr. President, I send a managers' amendment to the desk 
and ask for its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for himself and Mr. 
     Durbin, proposes an amendment numbered 3595 to amendment No. 
     3559.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. GRASSLEY. Mr. President, our procedure today is we have the 
managers' amendment pending. We will lay this amendment aside from time 
to time as Members come over to offer amendments. I am going to visit 
with Senator Durbin on procedure. So, in the meantime, I suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent that I be 
allowed to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WELLSTONE. I thank the Chair.
  (The remarks of Mr. Wellstone pertaining to the introduction of S. 
2489 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mr. WELLSTONE. I yield the floor.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. We hope very much that Members on both sides of the 
aisle will come to the floor and offer amendments on the bankruptcy 
bill. Both sides have reached an agreement on the number of amendments 
to be offered. All we have to have is time agreements on those 
amendments, and if a vote is necessary on those amendments, have a 
vote.
  Senator Durbin has worked very hard with me for his part, for the 
Democratic Members, as I have for the Republican Members, to get a very 
good bankruptcy bill before this body. It was hard work for the last 
year putting a bill together. I really appreciate his cooperation, 
including getting it through the Judiciary Committee by a vote of 16-2, 
then additionally accommodating some other Members who are not on the 
Judiciary Committee, the committee of jurisdiction over bankruptcy.
  We accommodated several Members, both on the Judiciary Committee and 
not on the Judiciary Committee, through the consideration of their 
amendments in some negotiating sessions we had last week to limit the 
number of amendments, also to accept, as I have indicated, in the 
managers' amendment many of the ideas that people have.
  So since Senator Durbin and I have worked together in a cooperative 
and very much bipartisan way on this legislation, we hope that at these 
almost midnight hours of this session, as well as midnight hours of the 
consideration of this legislation through the process of a year and a 
half, that we would not have Members stalling by not coming to the 
floor and offering their amendments.
  So we hope very much that people will come over and do that. We are 
ready for those considerations. The floor leaders of both parties very 
much want to see this legislation pass. And we ought to do that 
because, as Senator Durbin and I have described for the Members of this 
body, there is very much a need for this legislation, and particularly 
since we have this tradition of bipartisanship on the issue of 
bankruptcy, not only between Senator Durbin and myself but historically 
over the last decade and a half between his predecessor, Senator 
Heflin, now retired from the Senate, and myself. We want to keep that 
tradition going. There is just now the one simple process of Members 
coming over here and offering amendments that we have all agreed should 
be considered.

[[Page S10453]]

  There is no controversy at this point, except should an amendment be 
adopted or not. There is no controversy of whether or not this bill 
should eventually come to a vote. There is no controversy about what 
amendments should be offered. Hopefully, there is no controversy over 
how long we should discuss these amendments--a thorough discussion but 
with time limits--and eventually get this bill passed and get it to the 
conference committee. There Senator Durbin and I are going to need a 
lot of time.
  There is a tremendous difference between our bill and the House bill. 
Senator Durbin and I need the rest of this session. And we hope that 
the rest of this session that we are talking about isn't October 1. We 
hope it is from this date of September 17 to the end of the session to 
work out the differences between the House and Senate. So that is why 
we want Members to come.
  In the meantime, I say to Senator Durbin, I thought I would --yes, 
let me yield to Senator Durbin.
  Mr. DURBIN. I note September 17 is an important date in the history 
of the world, because it is the birthday of the Senator from Iowa, and 
I think it is appropriate that we acknowledge that on the floor of the 
Senate, and also give him a great birthday gift by moving this bill 
along in an efficient manner.
  Mr. GRASSLEY. Thank you.
  Mr. DURBIN. I have called the Democratic Senators who have told me 
they have pending amendments and asked them to come to the floor as 
soon as possible so that we can start the amendment consideration. 
There is one amendment which the Senator from Massachusetts, Senator 
Kennedy, would like to offer relative to the minimum wage which does 
not relate directly to this bill, but there has been an agreement that 
he will have that opportunity. I think he will be here within an hour, 
and we can discuss exactly when that amendment might come up.
  I just say, as I have said before on the floor, it has been a 
pleasure to work with Senator Grassley and his staff. I think the way 
that we resolved over 30 amendments on this might be a good way to 
legislate. Because literally Senator Grassley and I, with our able 
staff members, and people from the administration, sat in a room and 
worked through some 30 different amendments.
  We now have pending about a dozen that were unresolved that we think 
should be the subject of floor votes. Once those have been voted on, we 
are prepared, I hope, with a good work product to move forward, to pass 
a bill, and move to conference to consider a very complicated and 
complex area of the law but one so critically important to over a 
million Americans each year who file for bankruptcy in the United 
States.
  We want to make certain that we keep those bankruptcy courts 
available for those who have truly reached the end of the rope and have 
absolutely nowhere to turn; and that, I think, describes the vast 
majority of people who come to the bankruptcy court. But we also hope 
to tighten the procedures to eliminate those abuses, petitioners who 
come to court who should not, those who were in court and engaged in 
tactics that, frankly, we do not think should be acceptable.
  We are also going to try to address in the course of the amendments 
to this bill questions relative to the whole offering of credit cards 
to Americans. I think virtually everyone here today can tell me that 
when they go home tonight and open up the mail, they are going to find 
another credit card solicitation--I see heads nodding in the gallery--
if you are a normal American. And I am sure they are nodding at home as 
well.
  We want to make sure that the credit that is offered in America is 
credit available to everyone. The democratization of credit in this 
country has been a positive thing. But we also want to say to those who 
offer credit: Do it in a responsible way. Be honest in terms of 
describing the credit arrangement that you are seeking. Be certain that 
the people you are dealing with are truly capable of incurring more 
debt and can get involved in this process with a clear understanding of 
their obligation. Make your monthly statements intelligible so people 
who pay a minimum monthly amount have some idea when it might come to 
an end. Disclose some peculiarities of credit. Am I taking a security 
interest every time I use my credit card--for the toaster I just 
purchased? All of these things, I think, are relevant and will be 
raised during the course of this.

  One of the Senators is going to offer an amendment which basically 
says we can declare ``time out.'' If we are tired of credit card 
solicitations, we ought to be able to call a number and tell them to 
cease and desist, stop bothering us with all these solicitations. I 
think there is a right in America to be left alone. One of the 
amendments that will be offered will address that particular issue.
  I thank the Senator from Iowa. I am going to make some phone calls 
and encourage our colleagues to come to the floor quickly.
  Mr. GRASSLEY. Mr. President, we probably have fewer Republican 
Members with amendments to offer, but I have also been on the phone to 
talk to those people, as well, to come to the floor to expedite this 
process. The Senate majority leader and Senator minority leader really 
want this bill to be passed.
  As I said, we need a long time to conference--our bill is quite a bit 
different from the House bill--to work out the differences and get a 
bill to the President before we adjourn.
  Mr. President, I would like to discuss several provisions of the 
consumer bankruptcy reform act which will greatly enhance the ability 
to collect child support from people who owe child support. When the 
Judiciary Committee marked-up the Consumer Bankruptcy Reform Act, I 
joined with Senators Hatch and Kyl to add an amendment to the bill 
which would protect and enhance the status of child support claimants 
during bankruptcy proceedings.
  The bill, which were reported out of the committee on a bipartisan 
vote of 16-2 now provides that child support obligations must be the 
first obligation paid during any bankruptcy proceeding. Under current 
law, child support is paid 7th so that often there just aren't funds 
available to pay to ex-spouses and children. I think that this bill 
will be tremendously helpful for those who are owed child support.
  And the National district Attorneys Association agrees with me. This 
organization represents more than 7,000 local prosecutors throughout 
the United States, many of whom must enforce child support obligations 
under title IV-D of the Federal Social Security Act.
  On September 2d, 1998, NDAA President John R. Justice wrote me to 
express the association's belief that this legislation will 
``substantially assist'' efforts to collect child support for the 
children and spouses of debtors who have filed for bankruptcy. This 
letter went on to note that association supports the act because S. 
1301 contains ``enormous enhancements to support collection remedies'' 
and represents a ``major improvement to the problems facing child 
support creditors in bankruptcy proceedings.''
  The reason it's important to put child support claimants at the top 
of the list during a bankruptcy proceeding is that most bankrupts don't 
have enough money to fully pay all their creditors. So, somebody's not 
going to be paid. This bill makes it more certain that child support 
will be paid in full before other creditors can collect a penny. That's 
real progress in making sure that children and former spouses are 
treated fairly.
  Also, the amendment accepted by the committee provided that someone 
owed child support can enforce their obligations even against the 
exempt property of a bankruptcy. This means that wealthy bankrupts 
can't hide their assets in expensive homes or in pension funds as a way 
of stiffing their children or ex-spouse. This is another example of how 
this legislation will help, not hurt, child support claimants.
  Outside the bankruptcy context, when there are delinquent child or 
spousal support obligations, State government agencies step in and try 
to collect the child support. S. 1301 exempts these collection efforts 
from the automatic stay. The ``automatic stay'' is a court injunction 
which automatically arises when anyone declares bankruptcy and it 
prevents creditors from collecting on their debts.
  But, now, if this legislation passes, State agencies would be in a 
much better position to collect past due child

[[Page S10454]]

support. In practical terms, this means State government agencies 
attempting to collect child support can garnish wages and suspend 
drivers licenses and professional licenses. Mr. President, clearly, 
this bill will help State governments catch deadbeats who want to use 
the bankruptcy system to get out of paying child support.
  Taken together, these changes will significantly advance protection 
for child support claimants in the context of bankruptcy proceedings. 
This is why the National District Attorneys Association, an 
organization which represents many of the prosecutors who must enforce 
child support obligations, supports this bill. And these changes 
provide yet another compelling reason to support S. 1301.
  Mr. GRAMM. Mr. President, I requested some morning business time. It 
is my understanding that our colleague from Minnesota came over and 
asked unanimous consent to speak as in morning business. I also had 
checked with our dear friend, the Senator from Iowa, about the 
possibility of doing the same. If I wouldn't be delaying the important 
business of the Senate, I ask unanimous consent to speak as in morning 
business for 15 minutes.
  The PRESIDING OFFICER (Mr. Hagel). Without objection, it is so 
ordered.

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