[Congressional Record Volume 145, Number 163 (Wednesday, November 17, 1999)]
[Senate]
[Pages S14678-S14687]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                BANKRUPTCY REFORM ACT OF 1999--CONTINUED

  Mr. KENNEDY. Mr. President, I understand we are back on the 
bankruptcy legislation; is that correct?
  The PRESIDING OFFICER (Mr. Sessions). The Schumer amendment has not 
been disposed of.
  Mr. KENNEDY. With the understanding of the Senator from New York, I 
ask unanimous consent we temporarily lay aside that amendment.
  Mr. GRASSLEY. Reserving the right to object, and I will not object, I 
previously talked to the Senator from Massachusetts about time 
agreement on his amendment. I prefer to forego a time agreement and 
have him proceed accordingly. I have no objection.
  The PRESIDING OFFICER. Without objection, the Senator from 
Massachusetts is recognized.


                           amendment no. 2652

(Purpose: To amend the definition of current monthly income to exclude 
                       social security benefits)

  Mr. KENNEDY. I call up amendment numbered 2652.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Massachusetts [Mr. Kennedy] proposes an 
     amendment numbered 2652.

  Mr. KENNEDY. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 11, line 2, insert before the first semicolon ``, 
     but excludes benefits received under the Social Security 
     Act''.

  Mr. KENNEDY. Mr. President, this is a rather simple amendment. The 
amendment I have offered will protect a debtor's Social Security 
benefits during bankruptcy. This amendment is very important to older 
Americans. I hope my colleagues will support it as our House colleagues 
supported it last year.
  As currently written, the means test in the pending bill will require 
debtors to use their Social Security benefits to repay creditors. My 
amendment excludes Social Security benefits from the definition of 
``current monthly income'' and ensures that those benefits will never 
be used to repay credit card debt and other debt.
  This amendment is particularly important to seniors. Between 1991 and 
1999 the numbers of people over 65 who filed bankruptcy grew by 120 
percent. If we look over the figures from 1991 to 1999 by age of 
petitioner, we see the growth of those that are going through 
bankruptcy primarily have increased in the older citizen age group. 
This is primarily a result of the downsizing, dismissing older workers 
and because of health care costs--primarily they have been dropped from 
health insurance. As the various statistics show, increasing numbers of 
individuals have been impacted because of the prescription drugs.
  Debtors filing a medical reason for bankruptcy, as the chart shows, 
reflects the fact we have gotten a significant increase in the number 
of older people who have gone into bankruptcy. The debtors who file as 
medical reasons for bankruptcy, we find, increases dramatically for 
older workers primarily because of health care costs more than any 
other factor.
  We believe very strongly those individuals, most of whom are 
dependent upon Social Security as virtually their only income ought to 
have those funds protected so they will be able to live in peace with 
some degree of security and some degree of dignity.
  This is sufficiently important. One can ask, why are we doing this 
now rather than before? The reason it was not necessary before is 
because the Social Security effectively was protected with a series of 
protections that were included in the existing bankruptcy law which 
have not been included in this legislation. Therefore, without this 
kind of an amendment, they would be eligible for creditors. We think 
protecting our senior citizens, those on Social Security, as a matter 
of both public policy and the fact of the importance of their 
contributions, obviously, in terms of society, should be protected 
during their senior years.
  Today, many Americans work long and hard into the senior years. A 
growing percentage of the population is over the age of 85 and 
predominantly female. We see over the period of the next 10 years our 
elderly population will double and the increase in the percentage of 
women is going to increase significantly, as well. Others may be able 
to find alternative employment but at substantially lower wages or 
without health and other benefits that become increasingly important 
with age.
  In spite of all of the efforts to slow down the discrimination 
against elderly, in too many circumstances in our country today, the 
elderly are discriminated against in terms of employment.
  Older Americans sometimes resort to short-term, high-interest credit 
when faced with unemployment because they assume their unemployment 
will be temporary. They hope their use of credit or credit card debt 
will serve as a bridge to cover the necessities until they start 
receiving paychecks again. Due to their age, however, many of these 
individuals never earn a salary comparable to the pay they lost. They 
find themselves unable to deal with the new debt they have incurred. 
When they have nowhere else to turn, they sometimes turn to the safety 
value of bankruptcy.

  Older Americans are also more frequent victims of predatory lending 
practices. Sometimes, bankruptcy is the most viable avenue for an 
elderly person to address the financial consequences of being 
victimized by unscrupulous lenders. It is unfortunate that Senator 
Durbin's amendment to address that problem was defeated last week.
  Studies of the problems facing older Americans tell us the same sad 
story. In one study, one in ten older Americans reported that they 
filed for bankruptcy after unsuccessfully attempting to negotiate with 
their creditors. In some cases, their creditors threatened them with 
seizure of property, or placed harassing collection calls. Some of 
these senior citizens explained that they have been the victims of 
credit scams, and they were seeking relief in the bankruptcy courts.
  For example, a 70-year-old woman filed for bankruptcy after her son 
discovered that she has allowed herself to become involved in a number 
of dubious financial transactions, including buying more than six 
different expensive and duplicative life insurance policies and 
spending several thousand dollars on sweepstakes contests. At the time 
of her bankruptcy, she had mortgaged her previously mortgage-free home 
for more than $74,000 to try and pay off her debts. She was in danger 
of losing the home she shared with her husband who was in failing 
health.
  The bottom line is that bankruptcy shouldn't be made more difficult 
for those who are depending on Social Security for their livelihood.
  Social Security was developed to ensure that seniors can live their 
golden years in dignity. If we allow Social Security income to be 
considered while determining whether someone is eligible for 
bankruptcy, a portion of those benefits could be used in a manner 
inconsistent with Congress' intent.
  Some of my colleagues oppose this amendment because they argue that 
wealthy seniors would be the beneficiaries. But, practically speaking, 
wealthy debtors rarely use Chapter 7--they've more likely to file under 
Chapter 11 of the bankruptcy code.
  For very high income individuals, like Ross Perot, social security 
represents a very small percentage of their total income. Indeed, the 
maximum social security retirement benefit for a new 65-year-old 
retiree in 1997 was $16,000. For the Ross Perot in this country, 
$16,000 is a rounding error. His income is so high that including or 
excluding $6,000 changes his income by only a tiny percentage. But for 
the poor widow who gets 90 percent of her income from social security 
it makes a big difference.
  Rich debtors who file in Chapter 7 would be caught by the means test, 
whether or not the courts include Social Security income as part of the 
debtor's ``current monthly income.''
  It is important to realize that even though we do tax individuals on 
higher Social Security, 75 percent of our seniors pay no tax on Social 
Security because they are below $25,000 in income.

[[Page S14679]]

this is the group about which we are talking.
  For two-thirds of American seniors, Social Security income represents 
more than 50 percent of the their total income, and for 42 percent of 
seniors, it represents three-quarters of their total income. That is 
basically what we are talking about. We will hear: We can't accept this 
because it will create some loophole for our seniors.
  We have to realize that for 42 percent of all seniors, Social 
Security represents three-quarters of their total income. Furthermore, 
95 percent of all workers never reach the maximum Social Security 
benefit. That means only 5 percent of workers earn more than $72,000, 
and the average person is well below that income level. The myth of the 
wealthy senior using this amendment to avoid their obligations is just 
that--it is a myth.
  The purpose of Social Security is to guarantee there is a financial 
foundation provided for all senior citizens to ensure their basic 
needs--food, shelter, clothing, and medicines--are met. For two-thirds 
of senior citizens, Social Security provides more than half of their 
income, and Social Security benefits are hardly enough, in many cases, 
to meet these basic needs of seniors. Certainly, they cannot survive on 
less.
  If we are serious about providing financial security and personal 
dignity for the elderly, we must protect their Social Security benefits 
from claims in bankruptcy. Otherwise, we run the risk of vulnerable 
senior citizens being left with virtually nothing. In many cases, these 
are the people who are not healthy enough to return to work, who 
certainly lack the physical stamina to work the extra hours or get a 
second job. Social Security benefits are all they have--all they ever 
will have--and these few dollars are essential to their financial 
survival. There is a higher concern here than recovering every last 
dollar for creditors. It is guaranteeing the elderly some measure of 
financial security in their declining years.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I appreciate very much the amendment offered 
by the Senator from Massachusetts. Also, for the benefit of everyone in 
the Chamber and within the sound of my voice, on this bill we have 
moved along significantly from 300-plus amendments down to fewer than 
10 amendments.
  I hope we can continue working on this bill. I do not see any reason 
why we cannot finish this legislation tonight. We have a few 
amendments. I have heard it being rumored that we are going out early 
tonight. If the majority wants a bankruptcy bill, they can have a 
bankruptcy bill. The minority is not holding up the bankruptcy bill. We 
have, as I indicated, fewer than 10 amendments. A number of those 
Senators have agreed to time limits.
  It is a situation where, with all the work that has been done for 
years by the manager of the bill--not a matter of weeks but for years--
the goal is in sight, and we should move forward and pass this much-
needed legislation. I repeat, the problem is not with the minority. We 
are willing to work as late tonight as possible. We were willing to 
work yesterday. I hope we can move forward on these amendments.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DASCHLE. 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. DASCHLE. Mr. President, I come to the floor for a moment to 
commend both Senator Grassley, the manager on the Republican side, and 
our very distinguished assistant Democratic leader. We started the 
consideration of this bill several days ago. As I understand it, 20 
amendments were filed. We are now down to fewer than 10 amendments.
  As I understand it, there is a potential time agreement on virtually 
every amendment. Virtually every Senator has expressed their interest 
in bringing this bill to a conclusion and are prepared to accept time 
limits.
  I further understand the majority is giving some consideration now to 
going out early tonight after we have had a couple votes. I hope that 
isn't the case because I would like to see if we could finish this bill 
either tonight or tomorrow. There is no reason why we cannot finish it 
and move on to other matters. There are a number of other matters 
pending.
  So I speak for a lot of our colleagues in expressing our gratitude to 
the distinguished assistant Democratic leader for his effort yet again. 
He has done this on so many bills, but on this bill in particular he 
has really done an extraordinary job of not only working to accommodate 
Senators but also to manage the legislation on our side, along with 
Senators Leahy and Torricelli, and, of course, the chairman of the 
subcommittee, Senator Grassley, for his work in working with Senators 
who wish to offer amendments.
  I know some of these amendments have been accepted, and some of these 
amendments will require rollcalls. The point is, let's get the work 
done. Let's finish either tonight or tomorrow, but let's finish the 
bill.
  There was a time when I feared we would not finish this legislation 
this year. Maybe that is the only silver lining for those of us who 
would like to bring this matter to closure: That we will have the 
opportunity to finish this legislation.
  Many members still have amendments. Some of these amendments that are 
yet to be offered may tell the story with regard to Democratic support. 
There are some good amendments that are still pending. Senator Kennedy 
has a very good amendment that needs to be addressed. I hope we can do 
that and move on the other Democratic amendments that I know Senator 
Schumer and others have indicated they are prepared to offer.
  So we are getting down now to the final few amendments. I hope we 
will just keep the heat on, and finish up this critical legislation 
many of us have worked so long and so hard to enact.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. I have two unanimous consent requests.


                    amendment no. 2659, as modified

  Mr. GRASSLEY. Mr. President, the first unanimous consent is on an 
amendment, as modified. It is amendment No. 2659. I send the 
modification to the desk and ask unanimous consent it be considered 
agreed to, and the motion to reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2659), as modified, was agreed to, as follows:

       On page 18, line 5 insert ``(including a briefing conducted 
     by telephone or on the Internet)'' after ``briefing''.
       On page 19, line 15, strike ``petition'' and insert 
     ``petition, except that the count, for cause, may order an 
     additional 15 days.''

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that at 4:30 we 
proceed to two stacked votes on the pending Feinstein amendment and the 
Schumer amendment, and do it in that order, with 4 minutes equally 
divided in the usual form between the two votes, and that no amendments 
be in order prior to the votes. Maybe I ought to correct this. I think 
we should say there would be 2 minutes divided on the Feinstein 
amendment and then 2 minutes before we vote on the Schumer amendment--
or 4.
  Mr. DASCHLE. Reserving the right to object, I want to be sure. Is it 
amendment No. 2761? Is that the Schumer amendment referred to by the 
Senator from Iowa?
  Mr. GRASSLEY. Amendment No. 2762.
  Mr. DASCHLE. Amendment No. 2762.
  Mr. GRASSLEY. So let me once again state this: I ask unanimous 
consent that at 4:30 we proceed to two stacked votes on the pending 
Feinstein amendment, with 4 minutes equally divided to discuss the 
Feinstein amendment, and then at the end of that vote have 4 minutes 
equally divided to discuss the Schumer amendment, and then immediately 
proceed to a vote on or in relation to the Schumer amendment, and that 
no amendments be in order prior to the votes.
  Mr. REID. Reserving the right to object, could I ask the manager of 
the bill about why we can't vote on amendment No. 2761, also a Schumer 
amendment?

[[Page S14680]]

  Mr. GRASSLEY. Which amendment is that?
  Mr. REID. The Schumer-Santorum amendment.
  Mr. GRASSLEY. We have an objection from the Banking Committee on that 
one at this point. And also, for the benefit of Senator Kennedy, who 
has been very patient, I have one Senator I have to consult before we 
go to a final decision on that amendment. But I think we can take care 
of this when we are over here voting, if you would let us proceed to 
these. And then I will work with you to get to the bottom of that at 
the time of that vote. Is that OK?
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. GRASSLEY. 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.
  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, to sum up my amendment, what this 
bankruptcy bill is all about is encouraging debtor responsibility--in 
other words, to the extent that an individual possibly can, they should 
repay their debt. That is one side of it.
  I think to the extent the credit industry can be responsible, you 
need to have a balance between the two. Right now, there is not a 
balance between the two. I think we all know of people who have a 
number of credit cards who do not have the income even to pay back the 
minimum debt or the minimum monthly payment plus interest over a period 
of time.
  Let me give an example. If you have a $1,500 debt and your minimum 
monthly payment is $25 and you have no late fees, no new purchases, at 
19.8-percent interest, it takes 282 months to pay that debt off. I know 
people in this situation who shouldn't have credit cards, who should 
have been checked out, who have six, who are going into bankruptcy 
because they didn't understand this simple concept.
  What the amendment before you would do is ask the Federal Reserve to 
do a study of lending practices in this area and make public their 
findings, and also have the ability to set new regulations if they 
believe those regulations are warranted.
  This amendment was passed a year ago by a voice vote. It was removed 
in conference. The amendment would be accepted. My concern is that it 
would again be deleted in conference. Therefore, I have asked for the 
yeas and nays. I am hopeful this Senate will go on record as supporting 
this study by the Federal Reserve.
  I thank the Chair and yield the floor.
  Mr. GRASSLEY. Mr. President, I yield back the remainder of the time 
we have on this side.
  The PRESIDING OFFICER. All time is yielded back.
  The question is on agreeing to amendment No. 2756. The yeas and nays 
have been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. FITZGERALD (when his name was called). Present.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain), 
is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 82, nays 16, as follows:

                      [Rollcall Vote No. 368 Leg.]

                                YEAS--82

     Abraham
     Akaka
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Bryan
     Burns
     Byrd
     Campbell
     Chafee, L.
     Cleland
     Cochran
     Collins
     Conrad
     Craig
     Crapo
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Frist
     Gorton
     Graham
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Helms
     Hollings
     Hutchison
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McConnell
     Mikulski
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (OR)
     Snowe
     Stevens
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                                NAYS--16

     Allard
     Ashcroft
     Brownback
     Bunning
     Coverdell
     Enzi
     Gramm
     Hagel
     Hutchinson
     Inhofe
     Lott
     Mack
     Smith (NH)
     Specter
     Thomas
     Thompson

                        ANSWERED ``PRESENT''--1

       
     Fitzgerald
       

                             NOT VOTING--1

       
     McCain
       
  The amendment (No. 2756) was agreed to.
  Mr. LEAHY. I move to reconsider the vote.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, 4 minutes are now 
evenly divided on the Schumer amendment No. 2716.
  Mr. GRASSLEY. I suggest the absence of a quorum because we can work 
something out and maybe avoid a vote.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           amendment no. 2652

  Mr. GRASSLEY. I wish to make it clear, what I am going to ask 
unanimous consent on now is unrelated to what we are trying to work out 
on the Schumer amendment.
  Mr. President, the managers have agreed to accept Senator Kennedy's 
amendment, so I ask unanimous consent that amendment No. 2652 be 
accepted.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2652) was agreed to.
  Mr. LEAHY. I move to reconsider the vote.
  Mr. GRASSLEY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. GRASSLEY. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Enzi). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. 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. GRASSLEY. Mr. President, I ask unanimous consent that we proceed, 
then, to 2 minutes of debate on that side, 2 minutes on this side, and 
then we go to a vote.
  The PRESIDING OFFICER. That is the regular order. Who yields time?
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the yeas 
and nays be vitiated on the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. 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. GRASSLEY. 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. GRASSLEY. Mr. President, there will be no more rollcalls today. 
We hope to continue debating some amendments, and they will be stacked 
to be taken at a time determined by the leader tomorrow.
  Mr. LEAHY. Mr. President, again, I reiterate what I said before: The 
Senator from Iowa and I, the Senator from New Jersey, Mr. Torricelli, 
and Senator Hatch have all been working very hard. We have gone from 
300 some odd amendments down to only a half dozen or so remaining. I 
will continue to work with my friend from Iowa to try to clear whatever 
we can.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that any votes 
ordered today be stacked for a time to be determined by the leader.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEAHY. Mr. President, I know my good friend from Alabama is here

[[Page S14681]]

as manager on his side. I know we have no further rollcalls on this. I 
see my friend from Wisconsin on the floor. I am wondering if we can get 
some of the debate out of the way, and I wonder if we might yield to 
the Senator from Wisconsin and let him begin debate on his amendment.
  Mr. REID. Will the Senator yield for a question?
  Mr. LEAHY. Yes.
  Mr. REID. I say to my friend from Vermont that in looking over these 
amendments, which have gone from 320 to now probably 7 or 8, a handful 
of amendments, the Senator understands that the movement of this 
bankruptcy bill is not being slowed down on this side of the aisle. Our 
Members have been very cooperative. Would he agree to that?
  Mr. LEAHY. Yes. The Senator from Nevada has cleared out an awful lot 
of them. I think we have cleared 300-some-odd down to half a dozen or 
so. We could, for example, vote tonight without further debate on the 
Schumer-Santorum amendment, No. 2761. We could stagger them in the 
morning. I came in at 10 yesterday morning to be prepared to manage the 
bill on this side, and, for whatever reason, we stayed in morning 
business until 4 in the afternoon. What I am trying to do here--and I 
know the Senator from Alabama is on the floor, too--if there are things 
we can take care of on the bill tonight, let's do it.
  Mr. REID. If the Senator will yield, Senator Wellstone has two 
amendments he will offer first thing in the morning. Senator Feingold 
has one amendment that has already been offered. He wants to debate it 
some more, and he said he would do that tonight. We also have Senator 
Feingold who has one other amendment he wishes to offer at a subsequent 
time. We also have a Dodd amendment that, I think with the managers' 
bill, we have worked out, and it has been agreed to by the chairman of 
the Judiciary Committee and the manager. Senator Sarbanes has an 
amendment he wishes to offer. Senator Harkin has an amendment he said 
he may offer tonight. We are basically finished.
  The two things that are holding this up--and we should not play 
around with it anymore--are an amendment by the Senator from New York 
dealing with clinics, on which he has agreed to a half-hour time limit, 
and we have the Senator from Michigan, Mr. Levin, who has agreed to 17 
minutes on an amendment relating to gun manufacturers.
  I say to my friend, in short, we have almost nothing left. So it 
would seem to me we should move forward as rapidly as possible and 
finish this bill.
  Mr. SESSIONS. Mr. President, on the order, I think it would be 
appropriate for Senator Feingold to proceed at this time. Further, I 
think we will proceed without unanimous consent after that. Senator 
Grassley will be back, and we can decide what to do then.
  I yield the floor.


                         PRIVILEGE OF THE FLOOR

  Mr. INHOFE. Mr. President, I ask unanimous consent that Paul Barger 
have the privilege of the floor for this day.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2748

  The PRESIDING OFFICER. Under the previous order, the Senator from 
Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I call for the regular order with 
respect to amendment No. 2748.
  I wish to speak on the landlord-tenant amendment I offered last week 
and, in particular, take a few minutes to respond to some of the 
arguments made against it by the Senator from Alabama. This amendment 
is designed to lessen the harsh consequences of section 311 of the bill 
with respect to tenants while at the same time protecting the 
legitimate financial interests of landlords.
  Just to review, current law provides for an automatic stay of 
eviction proceedings upon the filing of a bankruptcy case. Landlords 
may apply for relief at that stage so the eviction can proceed. But it 
is a process that often takes a few months.
  Section 311 of Senate bill 625, the bill we are considering, 
eliminates the stay in all landlord-tenant cases so that an eviction 
can proceed immediately. In essence, my amendment would allow tenants 
to remain in their apartments while trying to sort out the difficult 
consequences of bankruptcy if, and only if, they are willing to pay the 
rent that comes due after they file for bankruptcy. If the tenant fails 
to pay the rent, the stay can be lifted 15 days after the landlord 
provides notice to the court that the rent has not been paid. If the 
reason for eviction is drug use or property damage, the stay can also 
be lifted after 15 days.
  Finally, if the lease has actually expired by its terms--in other 
words, if there is no more time on the lease and the landlord plans to 
move into the property--then, again, after 15 days notice the eviction 
can proceed. This 15-day notice period does not apply if the tenant has 
filed for bankruptcy previously. In other words, in cases of repeat 
filings, the stay never takes effect, just as under section 311 in this 
bill.
  So we are all clear on why this whole issue came up in the first 
place, the main abuse that has been alleged is in Los Angeles County, 
where unscrupulous bankruptcy petition preparers advertise filing 
bankruptcy as a way to live rent free. Under my amendment, first of 
all, you could never live rent free. The debtor must pay rent after 
filing for bankruptcy. If the debtor misses a rent payment, the stay 
will be lifted 15 days later. Second of all, the automatic stay does 
not take effect if the tenant is a repeat filer. So we take care of 
this problem of the repeat filer, which is exactly what the Senator 
from Alabama and others portrayed in committee as the reason this 
provision is needed.
  So my amendment gets at the abuse, and it protects the rights and 
economic interests of the landlord. What it eliminates, though, is the 
punitive aspect of this amendment and the possibility that tenants who 
are willing and able to pay rent once they get a little breathing room 
from their other creditors will instead be put out on the street.
  I am, frankly, disappointed that my colleague from Alabama insists on 
the harsh aspects of section 311 when my amendment would get at the 
problem he has identified just as well.
  The Senator from Alabama argued yesterday that somehow my amendment 
changes current law and moves us in the direction of litigation and 
delay. On the contrary, my amendment leaves intact the current law that 
allows landlords to get relief from the automatic stay. Let me be very 
clear about that. My amendment does not eliminate the ability of 
landlords to apply for relief from the stay under current law. The law 
now gives debtors some breathing room in legal proceedings, including 
eviction proceedings. But landlords can apply for relief from the stay. 
It is not an abuse of the law to take advantage of the automatic stay 
to get your affairs in order. Some tenants use that time to work out a 
payment schedule for their back rent so they can avoid eviction. Most 
landlords don't want to throw people out on the street. They just want 
to be paid. My amendment requires that they be paid once bankruptcy is 
filed, or the eviction can proceed immediately. But even if the rent is 
paid while the bankruptcy case is pending, if a landlord can still seek 
relief from stay under the normal procedures and press forward with the 
eviction.
  I frankly think that most landlords will be happy to let a tenant 
stay as long as the rent is being paid. Who knows, if the bankruptcy is 
successful, especially if it is a Chapter 13, the tenant may be able to 
pay the past due rent. That certainly is not going to happen if the 
tenant is evicted. But if the landlord really doesn't want the tenant 
to stay, the landlord can seek relief. So my amendment doesn't allow a 
tenant to stay in the apartment indefinitely by resuming payment of 
rent. By no means does this amendment permit a tenant to stay in an 
apartment indefinitely without a lease.
  And any suggestion to the contrary is just wrong. It doesn't do that 
at all. It just covers the few months after the bankruptcy petition is 
filed when the debtor is most vulnerable and the debtor is most in need 
of a roof over his or her head.
  Now let me address one of the frequent refrains of the Senator from 
Alabama when he talks about this provision. He seems to be very 
offended by the idea that people are staying in

[[Page S14682]]

their apartments after the term of their lease has expired. Those who 
are familiar with landlord-tenant law know that this is commonplace in 
the rental market. Many, many leases are for a term of one year but 
convert to a month to month lease when the year is up. The contract 
essentially remains in force, but the term has expired. There is 
nothing wrong with that. It is perfectly legitimate. Typically, the 
conversion to month-to-month tenancy is provided for in standard lease 
language.
  This is not an abuse. It is the way many leases proceed in this 
country on a day-to-day basis.
  Furthermore, the language of section 311 doesn't lift the stay when 
the term of a lease has expired but rather in cases where ``a rental 
agreement has terminated under the lease agreement or applicable state 
law.'' Well, most rental agreements ``terminate'' when a rent payment 
is missed. So section 311 applies in all landlord-tenant cases, not 
just those where the lease term has expired.
  I want to remind my colleagues that both the bill we passed last 
year, and the conference report had a form of the protection that my 
amendment provides for debtors. Section 311 of the bill that we are 
working on now is harsher on tenant debtor than the conference report 
from last year and than the House bill that passed earlier this year.
  Now let me respond to what I think is the core of Senator Sessions' 
objection to my amendment. He said last week that the automatic stay is 
always lifted, that the tenant never wins. So why not just get rid of 
the stay. It's just a waste of time and money for the landlord.
  Mr. President, I have a letter here from a debtor's attorney named 
Henry Sommer. Mr. Sommer is an expert in consumer bankruptcy cases. He 
is the author of the widely used treatise Consumer Bankruptcy Law and 
Practice, which is published by the National Consumer Law Center. He 
indicates in his letter that has represented thousands of low-income 
consumer debtors over the past 25 years. I ask unanimous consent that 
Mr. Sommer's letter be printed in the Record at the conclusion of my 
remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. FEINGOLD. Mr. President, Mr. Sommers heard the remarks of the 
Senator from Alabama last week in opposition to my amendment. He 
writes:

       The statement was made that landlords always prevail in 
     automatic stay motions. This is not correct. In my personal 
     experience, I doubt that landlords have prevailed in even 20% 
     of the cases. in most of the other cases, the family paid the 
     rent and the motion was either withdrawn or denied.

  Mr. Sommers goes on to state:

       The more important point is that in most cases no motion is 
     brought by the landlord. The automatic say does what it is 
     intended to do. In these cases, the family that was facing 
     eviction cures the rent arrears and remains in its apartment. 
     The landlord is made whole, and the family is permitted the 
     time necessary to reorganize its finances.

  Mr. Sommers also discusses my amendment.

       To the extent there are abuses in the current system, your 
     amendment will provide prompt and efficient relief by giving 
     landlords a streamlined procedure that could be pursued 
     quickly and without an attorney.

  That's a crucial point, Mr. President, because one of the concerns 
expressed by the Senator from Alabama is the expense and inconvenience 
of the relief from stay process for landlords under current law. Mr. 
Sommers concludes:

       Your amendment would make it impossible to obtain 
     significant delay simply by filing a bankruptcy petition, as 
     can occur today. But it would not hurt the innocent family, 
     struggling to get its finances together, that is able to 
     begin making rent payments and cure its rent default.

  That is really the crucial point Mr. President. We are talking about 
real people here. People who are very vulnerable. The Senator from 
Alabama argued yesterday that a landlord may have another tenant lined 
up to move into an apartment. And he said that if my amendment were 
adopted, and I'm quoting here, ``that tenant's life may be disrupted if 
the landlord can't deliver the premises.'' Well, Mr. President, what 
about the life of the current tenant, very possibly a single mother 
with children? For months she's been trying to make ends meet, but 
the child support she is owned by her ex-husband has not been coming. 
She misses a few rent payments as she tries to make sure her children 
are fed and their home is heated. The landlord starts eviction 
proceedings. And she is forced to file for bankruptcy.

  Now once the bankruptcy is filed, and her other creditors are 
temporarily at bay, she can pay her rent. On time and in full. What 
about disruption to her life if we put her and her children out on the 
street? Do we not care about that? If the landlord is not economically 
harmed, why wouldn't we allow her to stay in her apartment for a few 
months more? Why can't we maintain the breathing room that the 
automatic stay under current law provides? What is so terrible about 
that?
  Mr. President, this is the situation I am concerned about. I want to 
respond in a reasonable way to the abuses that section 311 is 
supposedly designed to address. But I don't want to cause undue 
hardship to people who are able to pay their rent while their 
bankruptcy case is pending.
  In the spirit of compromise, I have proposed a few other changes to 
the amendment to the Senator from Alabama, in response to some of the 
concerns he and his staff have raised. We are trying to listen very 
carefully to the points that the Senator from Alabama is making. First, 
I am willing to have the stay lifted not only in cases where the lease 
has expired and the landlord wants to move into the property, but also 
in cases where the landlord wants to let a member of his or her 
immediate family to occupy the premises. I will expand the language in 
my amendment to cover that situation.
  I will also expand the language to cover a situation where the lease 
has expired and the landlord has entered into a signed and enforceable 
agreement with another tenant before the bankruptcy petition is filed. 
That is the situation that the Senator from Alabama has suggested 
creates an unbearable hardship for the new tenant. So if a new lease 
has been made before the debtor files for bankruptcy, the landlord can 
apply for expedited relief from the stay.
  Finally, Mr. President, it has been suggested that some debtors will 
try to game the system by filing for bankruptcy the day after a rent 
payment is due, thus giving themselves almost a free month in the 
apartment before my amendment would apply. I am willing to try to stop 
this kind of abuse by requiring debtors to pay any rent that comes due 
up to 10 days before the filing of the petition.
  Mr. President, I am trying to be reasonable. I am going to make these 
changes in a second degree amendment and I hope the Senator from 
Alabama will accept the amendment. I want my colleagues to understand 
that this amendment is designed to address the abuses that the Senator 
from Alabama has identified, but do it in a much more reasonable way, 
so that we can protect some very vulnerable people from being thrown 
out on the streets at a very difficult time in their lives.


                Amendment No. 2779 to Amendment No. 2748

  Mr. FEINGOLD. Mr. President, I send a second-degree amendment to the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative assistant read as follows:

       The Senator from Wisconsin (Mr. Feingold) proposes an 
     amendment numbered 2779 to amendment No. 2748.

  Mr. FEINGOLD. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 1, line 5, strike all after ``(23)'' and insert the 
     following:
       under subsection (a)(3), of the commencement or 
     continuation of any eviction, unlawful detainer action, or 
     similar proceeding by a lessor against a debtor involving 
     residential real property--
       ``(A) on which the debtor resides as a tenant under a 
     rental agreement; and
       ``(B) with respect to which--
       ``(i) the debtor fails to make a rent payment that 
     initially becomes due under the rental agreement or 
     applicable State law after the date of filing of the petition 
     or within the 10 days prior to the filing of the petition, if 
     the lessor files with the court a certification that the 
     debtor has not made a payment for rent and serves a copy of 
     the certification to the debtor; or
       ``(ii) the debtor's lease has expired according to its 
     terms and (a) the lessor or a member of the lessor's 
     immediate family intends to personally occupy that property, 
     or (b)

[[Page S14683]]

     the lessor has entered into an enforceable lease agreement 
     with another tenant prior to the filing of the petition, if 
     the lessor files with the court a certification of such facts 
     and serves a copy of the certification to the debtor;
       ``(24) under subsection (a)(3), of the commencement or 
     continuation of any eviction, unlawful detainer action, or 
     similar proceeding by a lessor against a debtor involving 
     residential real property, if during the 1-year period 
     preceding the filing of the petition, the debtor--
       ``(A) commenced another case under this title; and
       ``(B) failed to make a rent payment that initially became 
     due under an applicable rental agreement or State law after 
     the date of filing of the petition for that other case; or
       ``(25) under subsection (a)(3), of an eviction action based 
     on endangerment of property or the use of an illegal drug, if 
     the lessor files with the court a certification that the 
     debtor has endangered property or used an illegal drug and 
     serves a copy of the certification to the debtor.''; and
       (4) by adding at the end of the flush material at the end 
     of the subsection the following: ``With respect to the 
     applicability of paragraph (23) or (25) to a debtor with 
     respect to the commencement or continuation of a proceeding 
     described in that paragraph, the exception to the automatic 
     stay shall become effective on the 15th day after the lessor 
     meets the filing and notification requirements under that 
     paragraph, unless the debtor takes such action as may be 
     necessary to address the subject of the certification or the 
     court orders that the exception to the automatic stay shall 
     not become effective or provides for a later date of 
     applicability.''.

  Mr. FEINGOLD. Mr. President, this second-degree amendment 
incorporates the modifications I just described. I hope it will be 
acceptable to the managers of the bill. I have actually shared these 
ideas and changes with the managers and with the Senator from Alabama.
  If not, I urge my colleagues to support it.
  I yield the floor.

                               Exhibit I

                                                      Law Offices,


                                       Miller, Frank & Miller,

                              Philadelphia, PA, November 10, 1999.
     Senator Russ Feingold,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feingold: I listened to some of the debate 
     concerning your amendment that would moderate some of the 
     landlord-tenant provisions of S. 625. I am writing to let you 
     know that some of the statements made in opposition to your 
     amendment are not in my experience accurate. (I have 
     represented thousands of low-income consumer debtors over the 
     last 25 years and also spend time educating and consulting 
     with other bankruptcy lawyers around the country.)
       The statement was made that landlords always prevail in 
     automatic stay motions. This is not correct. In my personal 
     experience, I doubt that landlords have prevailed in even 20% 
     of the cases. In most of the other cases, the family paid the 
     rent due and the motion was either withdrawn or denied.
       Overall, more than 20% of landlord stay motions probably 
     are granted, because no one denies that in a few cities there 
     have been widespread abuses (spurred by nonattorney petition 
     preparers, not by attorneys) and when landlords have gone to 
     court they have prevailed in almost all such cases. However, 
     even in these places the problem was being solved even 
     without legislation. I noticed that the figures given for Los 
     Angeles county (where the abuses were worst) were from 1996. 
     It is my understanding that changes in state law and in 
     bankruptcy court procedures have significantly reduced the 
     abuses since then.
       The more important point is that in most cases, no motion 
     is brought by the landlord. The automatic stay does what it 
     was intended to do. In these cases, the family that was 
     facing eviction cures the rent arrears and remains in its 
     apartment. The landlord is made whole, and the family is 
     permitted the time necessary to reorganize its finances. 
     Thus, even if it is true that in most cases where landlords 
     seek relief from the stay, such relief is granted (no data is 
     actually kept on the results of such motions), in the large 
     majority of bankruptcy cases tenants catch up on their rent 
     arrears, the landlord is satisfied, no motion for relief from 
     the stay is brought, and the family remains in its home.
       To the extent there are abuses in the current system, your 
     amendment will provide prompt and efficient relief by giving 
     landlords a streamlined procedure that could be pursued 
     quickly and without an attorney. Your amendment would make it 
     impossible to obtain any significant delay simply by filing a 
     bankruptcy petition, as can occur today. But it would not 
     hurt the innocent family, struggling to get its finances 
     together, that is able to begin making rent payments and cure 
     its rent default.
       Please contact me if you need further information about 
     tenants in bankruptcy.
           Very truly yours,
                                                  Henry J. Sommer.

  The PRESIDING OFFICER. The Chair recognizes the Senator from Alabama.
  Mr. SESSIONS. Mr. President, I appreciate the work of the Senator 
from Wisconsin. I know he cares deeply about this issue. He has made 
some changes in the previous amendment that make the bill more 
palatable. However, it still runs afoul of common sense and efficient 
operation of the bankruptcy system. Furthermore, it will allow abuse of 
the system in a way that is unjustified and unprecedented in terms of 
any other creditor of a person who goes into bankruptcy.
  We are asking a landlord for certain periods of time to extend free 
rent, when the grocer is not required to give free groceries and the 
gas station is not required to give free gas.
  Let me make a few points about this matter. It is a subject of great 
abuse in the United States. That is why we are here. The bankruptcy law 
was last amended in any significant fashion in 1978. Since that time, 
we have found that a large bankruptcy bar has developed. This has been 
very good in many ways, but also this skilled, experienced and 
specialized bar has learned how to utilize the Federal bankruptcy laws 
to maximize benefits for their clients, as they believe it is their 
duty to do. In the process, they have created abuses of innocent 
creditors and landlords, among others.
  That is not what we are about. Our responsibility, as a Congress, is 
not to blame the lawyers, is not to blame the tenants who take 
advantage of these things. The responsibility of Congress is to pass 
laws that are not easily abused and that end in just results.
  One of the most abused sections of the bankruptcy law has been the 
landlord-tenant situation. First, eviction procedures are set forth in 
the laws of all 50 States. One cannot simply throw somebody out of 
their apartment. One has to file an eviction notice, go to the State 
court, prove the case, and eventually get the tenant out. Many believe 
that process is far too prolonged and far too costly. That is what the 
law is. In many instances, it is good because it provides tenants 
opportunities to get their affairs together.
  With the current bankruptcy law, tenants have responded to ads in 
newspapers and fliers passed out in neighborhoods and throughout the 
communities. Those ads say: Up to 7 months free rent. Call us; we will 
take care of you. We guarantee you 2 to 7 months of delays in payment 
of your rent and guarantee you will not be evicted under those 
circumstances.
  How can that happen? Say a person is behind in his rent and also 
behind in other payments, and people have filed lawsuits against him, 
and he or she has gone to the lawyer to ask what to do, and the lawyer 
files for bankruptcy. Maybe the lease the person had with the landlord 
has already expired. Maybe it requires him to pay his rent monthly, and 
it has been 4 or 5 months since the rent has been paid, and the 
landlord has already commenced eviction actions against the tenant. 
When that happens, the matter normally goes forward in State court.
  Under normal State laws for removal of someone who does not pay their 
rent, when a bankruptcy court is involved, the eviction case is stayed; 
an automatic stay is issued. The landlord cannot proceed with that 
eviction until the stay is lifted in the bankruptcy court. Once that 
happens, the landlord can go back to State court and continue with his 
lawful eviction actions.
  This has caused quite a bit of gaming of the system. For example, I 
will share with Members some statistics from California. The Los 
Angeles County Sheriffs Department estimates that 3,886 residents filed 
for bankruptcy in 1996 simply to prevent the execution of valid court-
ordered evictions. The sheriff has the responsibility of actually 
evicting the tenant. The Sheriffs Department of Los Angeles said these 
3,886 bankruptcy petitions represent over 7 percent of all the eviction 
cases handled by the department and that losses have been estimated at 
nearly $6 million per year in that county. Some people routinely flaunt 
that automatic stay provision--lawyers do--that advertises that persons 
may live rent free by filing bankruptcy.

  One bankruptcy flier sent out said for a fee the lawyers will use 
more moves than Magic Johnson to prolong the eviction process.
  This is not good. A judge in California has dealt with this matter 
over and over again, and in an opinion, this

[[Page S14684]]

is what Judge Zurzolo in the Central District of California had to say 
about the evictions and how he believes how meritless they are. This is 
from his written opinion:

       . . . the bankruptcy courts . . . are flooded with chapter 
     7 and chapter 13 cases filed solely for the purpose of 
     delaying unlawful detainer evictions. Inevitably and swiftly 
     following this in bankruptcy court, the filing of these 
     cases, is the filing of a motion for relief of stay by the 
     landlord.

  After the bankruptcy is filed and the eviction notice is stopped, the 
landlord has to go into bankruptcy court with his lawyer and file for 
relief from stay and say: Look, I have not been paid rent for many 
months; the tenant is in violation of the lease; there is no asset of 
which the bankruptcy court has jurisdiction. Bankruptcy judge, allow me 
to proceed with my eviction.
  Or the landlord will say: The lease has expired. The tenant has been 
here a year. In month 14, the lease expired. He did not extend the 
lease. I want to remove him.
  This is what the judge continues to say in his opinion:

       These relief from stay motions are rarely contested and are 
     never lost. Bankruptcy courts in our district hear dozens of 
     these stay motions weekly, none of which involves any 
     justiciable controversies of fact or law.

  I don't know about the individual who says he represented a lot of 
cases and said he won some of the motions, but I don't believe they 
ought to be winning them under the law if the lease has expired, and 
that is what our amendment says. If the lease has expired, there cannot 
be an asset of the bankruptcy estate, and if there is no asset for the 
bankruptcy court to take jurisdiction over, it has no ability to issue 
any stay orders to protect or stop any litigation that is ongoing.
  That couldn't be the case. If the lease is behind and the payments 
have been so far delayed that the lease has been violated and, 
likewise, the tenant has no property interests, there is no asset 
before the bankruptcy court over which the bankruptcy court has 
jurisdiction. The bankruptcy court essentially has jurisdiction only 
over the assets, to make sure when a person cannot pay his debts, all 
the assets are brought into the pot and the people who should receive 
the money from the estate get it in proper order.
  We are talking about monumental abuse. This is a loophole that has 
been expanded over and over again. We are seeing record numbers of 
filings. Many people are filing bankruptcy solely for this protection.
  Senator Feingold's amendment, which he has worked hard to improve, is 
better than before, but is still unacceptable and still creates an 
unjust situation. For example, if a debtor owes rent and files for 
bankruptcy, he can wait until after his rent is due and then file it 
and have 15 days before his first rent payment is due. Then he could 
make that payment and not make any more payments and remain on this 
property--maybe even when the lease has expired he can stay there--and 
not pay the next month's rent.
  This is the problem I have been talking about. He has 2, 3, 4 months 
now. His lawyer is advising him how to do this. His lawyer is going to 
advise him, first of all: Pay me. Pay your lawyer and do not pay your 
other debts until you have to. The debtor will do that. Then the 
landlord has to get a lawyer to file a certificate of failure to pay 
rent, and once that has been approved by the court, after a further 
delay of 15 days, then he has to go back to State court, now months 
behind schedule, and pick up again his legitimate eviction notice.
  Bankruptcy court ought not be for that purpose. If the people of the 
United States want to provide individuals without assets a place to 
live, then we ought to do so. In fact, we do that. We have low-rent 
housing for people with low income or rent-free housing for people who 
cannot afford it. We have benefits for people who do not have housing. 
But why should an American citizen, a landlord, be required to provide 
to a tenant, who has violated his lease, an asset rent free that we in 
the U.S. Congress are not willing to fund? If it is so easy and it 
costs so little, why don't we pay for it? Why don't we tax American 
people to pay for other people's rent? We are doing that to a degree 
right now.
  I do not believe that is a legitimate approach to the matter. It is 
not common sense. It is not what American law is about. When you are in 
a Federal court, in a bankruptcy court, or a State court, if you have a 
lease, that is a contract, and if you violate that lease, then you lose 
the benefit of the contract.
  This is so basic and fundamental that I do not know how we in this 
Congress can think we can pass a law that makes American citizens 
responsible for someone to have a place to live when they are not 
paying for it.
  We have a number of different provisions in State law that allow 
tenants rights to hold on and refinance and maybe keep the place in 
which they live. That is all right. I want to continue that. If people 
want to change that, go to your State court, change your eviction laws 
in your State, and take it to your State legislature.
  Let's not make the bankruptcy law become a policy of social 
engineering to decide who should get special benefits and who should 
pay for those benefits. In effect, it is a tax. The landlord who loses 
this money is a person who is taxed. Indeed, we may have landlords 
going bankrupt if tenants do not pay rent.
  Two-thirds of rental residences in America today are four units or 
less. That means we have an awful large number of our grandparents and 
brothers-in-law who may have a duplex or garage apartment and are 
renting them to people, and all of a sudden, somebody does not pay. 
They cannot get the tenants out. The landlords are not receiving any 
money. Two, 3 months go by, and finally the landlord files for 
eviction. Boom, the tenant files for bankruptcy. Then, the landlord has 
to hire a lawyer to go to bankruptcy court, and that is another 2, 3 
extra months delay. The landlord is without rent for 2, 3 months, and 
they still do not have their property back.
  This is an abuse of bankruptcy law, and this legislation is designed 
to fix it. This bill does not change substantive landlord tenant law. 
Rather, it is a change in that if certain circumstances exist, the 
landlord does not have to hire a lawyer to go to Federal bankruptcy 
court to get relief.

  It says there is an exemption from the automatic stay if the eviction 
proceeding was started prior to the filing of the bankruptcy. If the 
landlord had already filed for eviction before the individual files for 
bankruptcy, the eviction process can continue as it would have 
normally.
  In addition, the bill says the automatic stay does not apply if an 
eviction proceeding was based on the fact that the lease had already 
been terminated. It was a year's lease, and you are in month 13, 14, 
15, 16 and no payments have been received and the landlord wants to 
lease to another tenant. It is the landlord's property. The tenant has 
no property rights. His lease has expired, for heaven's sake.
  I say to Senator Feingold, I respect his concern for these matters. 
States do provide protections for persons who have difficulty paying 
their rent.
  Also, many landlords all over America try to work with their tenants. 
They do not want to change tenants if they are happy with a tenant. If 
they can help work out the tenant's payments, for previous months, that 
is a courtesy extended by small landlords, two-thirds of whom have four 
units or less. Those courtesies can turn sour in a hurry if, after 
months of working with a tenant, the tenant becomes further and further 
behind in rent. Boom, a bankruptcy petition is filed; boom, they are 
stayed from eviction; months go by and the landlord has to hire a 
lawyer and great cost is incurred. This is an abuse of the system, and 
I must oppose this amendment.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator from 
Wisconsin.
  Mr. FEINGOLD. Mr. President, I am disappointed in the response of the 
Senator from Alabama. His comments to the effect that the only thing we 
should be considering is State laws having to do with leases and 
contracts almost suggests to me he does not believe there is any role 
for Federal bankruptcy law.
  Bankruptcy law is contemplated in the U.S. Constitution. It certainly 
was not understood there would be no role at all for Federal bankruptcy 
law to have an impact on people's lives in our States, whether it be 
Alabama or Wisconsin. The automatic stay is an integral part of the 
federal bankruptcy

[[Page S14685]]

laws and its purpose is not just to protect the property of the estate 
but also to provide some breathing room for the debtor.
  I will be the first to concede to the Senator from Alabama that one 
of the concerns in bankruptcy has to be making sure creditors get paid 
as much as possible and as efficiently as possible. That is legitimate. 
And a second important concern is to make sure people do not abuse the 
bankruptcy system.
  But the concern the Senator from Alabama refuses to address, refuses 
to discuss, is that the bankruptcy law is supposed to help people get 
back on their feet. I will tell you that one lousy way to help people 
get back on their feet is to kick them out of their apartments, when it 
serves no financial interest of the landlord for that to happen.

  The Senator from Alabama simply refuses to address the example I gave 
of a single woman with children, who is not getting her child support, 
who wants to and is prepared to pay her rent and is simply running into 
trouble and is ready to pay it again after she files for bankruptcy and 
has a stay against her other creditors. In the world that the Senator 
from Alabama portrays, this person loses out. This is deeply troubling 
to me.
  What more can you do than listen to a colleague give hypothetical 
after hypothetical after hypothetical about what might be wrong with 
the amendment and try to specifically address those concerns? That is 
exactly what I have done in making the changes contained in my second 
degree amendment.
  So, yes, efficiency in preventing abuses is an important principle. 
Let me review: The Senator from Alabama, both in committee and on the 
floor, has attempted to suggest that all kinds of abuses will still 
continue under the amendment that we have. The trouble is, the abuses 
he cites and the statistics he cites are all irrelevant to my 
amendment. My amendment will prevent the abuses.
  He talks about the abuse of lawyers who do repeat filings, especially 
in Los Angeles County. We addressed that. Under our amendment, if you 
do multiple filings, you are out of luck; the stay is lifted 
automatically. Essentially, the provisions of the bill that the Senator 
from Alabama prefers apply in that situation.
  In committee he argued against my amendment by saying: What happens 
if a landlord wants to move back into his own place? All right. We took 
care of that. We address that concern in the amendment. But then he 
says: What happens if his brother wants to move into the place? Well, 
we took care of that concern in this second degree amendment that I 
just offered.
  Here is another example, because instead of admitting that we have 
actually dealt with some of these hypotheticals, he says: What happens 
if the landlord has a signed agreement for a new lease prior to the 
filing of the bankruptcy? We addressed that concern too, but that still 
isn't good enough.
  But I tell you what frustrates me the most. The Senator from Alabama 
keeps saying that people will live rent free. It is as if I have said 
nothing here on the floor at all. It is as if I have not said, time 
after time after time, that under my amendment a tenant cannot live 
rent free for 5 or 6 months, as the Senator has suggested. After filing 
for bankruptcy, if you do not pay your rent as it comes due, you are 
out of there under my amendment.
  So what is all this talk about abuses, when in each and every 
hypothetical the Senator has proposed in committee or on the floor we 
have addressed his concern? We have addressed abuse. We have addressed 
the fact that the system has to be efficient.
  But what has not been addressed and what this amendment is trying to 
deal with is what the Senator from Alabama simply ignores. He gives no 
hope; he gives no alternative to the person that I describe: the woman 
with children, who is not getting her child support, who is willing and 
able to pay her rent once she files for bankruptcy, but the Senator 
from Alabama would have her booted out of her apartment with her kids 
at the very moment when she is trying to get back on her feet.
  So I urge the Senator from Alabama to actually review all of my 
attempts to try to address his concerns so that I can feel at least 
that this has been a process where he has raised concerns that he was 
worried about and we tried to deal with them. That is what we have been 
doing in debating and modifying this amendment.
  I know on other issues we have been able to do that with the Senator, 
and I appreciate that. But I urge him, surely there has to be a better 
answer than just ``tough luck'' for these individuals who I have 
described, who are not in a position where they are going to abuse the 
system, who cannot get month after month of free rent living, because 
that is exactly what we dealt to prevent in the amendment. We have 
specifically dealt with the problem of a person who tries to get more 
than 1 month of rent free.

  The whole problem with this overall bill is sort of symbolized by 
this debate. There needs to be some balance. I have recognized, in that 
spirit, the call of the Senator from Alabama for more efficiency, the 
call of the Senator from Alabama for preventing abuses. But where is 
the balance? Where is the recognition that there are human beings with 
limited resources who may need the opportunity to stay in that 
apartment and pay the rent after the bankruptcy is filed?
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. I do thank the Senator from Wisconsin for accepting 
some changes because of my objections to his last amendment. As I 
indicated earlier, I think he did respond to a number of those. But I 
also think he fairly clearly made the arguments I made a few minutes 
ago. I made those the last time his amendment came up also; and those 
were not addressed. They still remain a fundamental flaw.
  Mr. FEINGOLD. Will the Senator yield for a question?
  Mr. SESSIONS. Yes.
  Mr. FEINGOLD. What objection do you have?
  Mr. SESSIONS. My concern is that there is fundamentally no legal 
basis for a stay in bankruptcy court of a lease that has expired or a 
lease that has been breached by lack of payment--since there is none, 
then the landlord ought not to have to hire a lawyer and go to 
bankruptcy court. So I continue to have that concern. But the Senator 
from Wisconsin has repeatedly said the tenant would be able to remain 
on the property, but only if they paid rent.
  Let me give you a hypothetical.
  On October 1, the tenant's rent is due. The tenant does not pay. On 
October 11, he files bankruptcy. On November 1, the rent is due; and it 
is not paid. On November 1, the landlord immediately files his notice 
in the bankruptcy court. And then 15 days are allowed to go by, 
presumably so the tenant could file some other complaint in bankruptcy 
court, some other delay or motion. And 15 days go by; and on November 
16, the stay of the eviction proceedings is lifted. Then the landlord 
has to go back to the State court again to pursue his eviction notice, 
which has been stopped, which has probably fallen behind the 10,000 
other cases in that State court system. And now the landlord has a hard 
time bringing it up.
  So I would suggest to you, it is quite possible that the tenant could 
have 6 weeks rent free. I made the comment about ``rent free'' because 
I will show this advertisement right here in San Bernadino: ``7 months 
free rent.'' That is what is being advertised in the paper:

       No matter how far you are behind in your rent. We guarantee 
     you can stay in your apt. or house for 2-7 months more 
     without paying a penny!!! Find out how. We can stop the 
     Sheriff or Marshall and get you more time.

  Mr. FEINGOLD. Is the Senator aware that our amendment would prohibit 
what you are reading right there?
  Mr. SESSIONS. It does not exactly, but it gives them at least a month 
and a half--if not 2 months, a month and a half.
  Mr. FEINGOLD. Isn't it a fact----
  Mr. SESSIONS. In addition, it still allows the abuse of forcing the 
landlord to go to two different courts to pursue a legitimate----
  Mr. FEINGOLD. If I could follow up, under the scenario you described, 
isn't it true that you are talking about a maximum of 6 weeks, and not 
6 months? Wouldn't you concede that?
  Mr. SESSIONS. Under this scenario, it is clearly 6 weeks, if 
everything goes

[[Page S14686]]

perfectly for the landlord. It is guaranteed 6 weeks under these 
circumstances.

  Mr. FEINGOLD. I would suggest to the Senator, you described the most 
egregious and extreme possibility under our amendment. And you were 
talking about 4 months, 5 months, 6 months. Not only is that not 
accurate, that is clearly not my intent.
  My intent, as I have indicated time and again, is to try to make sure 
a person who is in this position has to pay that rent once they file 
for bankruptcy, and keep paying it or else they are out of luck. And 
the goal, just so it is clear to the Senator from Alabama, is obviously 
not to create that kind of scenario you described. If fact, you just 
made our case, that the maximum exposure there would probably be about 
6 weeks, not 6 months, as you suggested.
  Mr. SESSIONS. Mr. President, I believe I have the floor.
  The PRESIDING OFFICER. The Senator from Alabama has the floor.
  Mr. SESSIONS. Under most State eviction proceedings, a tenant who 
desires to stay on the property can maintain possession of that rental 
property 45 to 60 days. There are many rights and remedies for tenants. 
But at some point, the ability to stay without paying rent has to be 
ended. When you take that 45 to 60 days, and then file a bankruptcy 
petition, and then get another 6 weeks on top of that--and that is 
assuming everything goes smoothly, that the landlord can find a lawyer 
who will go to bankruptcy the first day he calls one, and who can get 
down there and file the proper petition or get his certificate filed. 
Maybe the landlord's lawyer does not understand how to file one of 
these certificates, and ends up billing him $250 or $300 for filing the 
darn thing, when, in fact, as the Senator, who is an excellent lawyer, 
knows, bankruptcy court has jurisdiction over property. It is the 
estate of the person who is filing. If there is no property, there is 
no estate, which is the case where the lease has expired, or the case 
where the lease has been breached by lack of payment. Then the 
bankruptcy court can't legitimately issue an order affecting that 
property. The bankruptcy judge can never issue an order under those 
circumstances. So why make somebody go to bankruptcy court to file 
these petitions if it will not do anything other than cost the landlord 
more money to delay the eviction and cost that person money?

  If we in the Congress want to fund people who can't pay their rents 
and give them emergency funding, something like that, that is a matter 
to debate. I don't think we ought to tax private citizens to support 
individuals in this fashion when their contractual rights have been 
ended. We have to make sure our bankruptcy system is a good, tight, 
legal system and not a social service agency.
  We give certain rights and benefits to debtors under bankruptcy law. 
We allow a person who has tremendous debts to walk in and wipe out 
every one of those debts. Unless their income is above the median 
income and they can pay back at least 25 percent of their debts, they 
can go in bankruptcy court and never pay anybody they owe. They do not 
have to pay their garage mechanic who fixed their automobile for them, 
not their brother-in-law who loaned their family money when they needed 
it, not their mother, not their credit card company, not their bank, 
not their doctor, not their hospital, just wipe them all out because we 
believe people ought not be crushed under a weight of debt.
  I do not believe we would expect the gas station to give free 
gasoline to somebody who has filed bankruptcy. I don't believe we would 
expect the grocery store to give free groceries to somebody who filed 
bankruptcy. Neither should somebody who has violated his lease, is 
subject to eviction under the appropriate State law, be given free 
rent, even for a month and a half, perhaps more. That is what our 
concern is.
  I understand the Senator's great passion for this circumstance, but I 
believe this would be a step backward. It would allow an abuse to 
continue which we need to eliminate. I hope the Members of this body 
will reject the amendment.
  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Mr. President, I appreciate the comments of the Senator 
from Alabama. Frankly, this isn't really about a great passion on this 
issue. All I am trying to achieve is some balance. I do think landlords 
should be paid their rent. I do think it is terrible when people abuse 
the system.
  But in case after case where the Senator from Alabama has presented 
an abuse, we have tried to address it. What it all came down to, when I 
asked him what he still objected to, was that he fundamentally doesn't 
believe in the principle behind the bankruptcy system, which is giving 
people an opportunity to get back on their feet and providing a little 
breathing room in the case of the type of person I described.
  I described a single woman with children who is not getting her child 
support, who is in danger of being booted out of that apartment. When 
the Senator responds, he talks about the people who game the system, 
people who have different debts all over the place and who can hire 
sophisticated attorneys. That is not who we are talking about.
  In fact, I refer back to Mr. Sommer's summary of what my amendment 
would do. The amendment is actually perfectly tailored to the situation 
of the person who can't hire a lawyer or afford a lawyer. That is who 
we are talking about. We are talking about people who certainly are not 
sophisticated enough or able to game the bankruptcy system. They are 
not in that category at all. They are people who simply want to stay in 
their apartment. They have financial problems, but once they file for 
bankruptcy, they want to be able to start paying that rent again.
  Let me read what Mr. Sommer said. He is not a person who works on 
bankruptcy. He is a distinguished author on bankruptcy law. He wrote to 
me:

       To the extent there are abuses in the current system, your 
     amendment will provide prompt and efficient relief by giving 
     landlords a streamlined procedure that could be pursued 
     quickly and without an attorney.

  Let me reiterate that. So much of the argument of the Senator from 
Alabama is premised on the idea that this is somehow a sweet deal for 
lawyers. What this expert says is that these provisions allow this kind 
of opportunity for a person who needs it without an attorney. He 
writes:

       Your amendment would make it impossible to obtain any 
     significant delay simply by filing a bankruptcy petition, as 
     can occur today.

  This expert makes it very clear that this is a significant 
improvement over current bankruptcy law, of which the Senator from 
Alabama is critical. Even with my amendment, he says it is almost 
impossible to obtain any significant delay simply by filing a 
bankruptcy petition. He concedes that some of that could happen today, 
as the Senator from Alabama has pointed out.
  Here is the last line, the critical piece that the Senator from 
Alabama simply won't address, when it comes to one of the purposes of 
Federal bankruptcy law. Mr. Sommer says:

       But it would not hurt the innocent family, struggling to 
     get its finances together, that is able to begin making rent 
     payments and cure its rent default.

  That is all I am trying to do, to get some balance here so that an 
innocent family that is trying to get its act together and finances 
together doesn't get booted out of its apartment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I appreciate the statements of the 
distinguished Senator from Wisconsin. I will offer for the record three 
advertisements that are not particularly unusual. One I read from 
earlier, how they can stop the sheriff and get you more time. Call us 
if you lost in court. Don't give up. Call us. We will give you more 
time.
  In other words, if you have had your eviction proceedings that every 
other citizen gets, come down and file bankruptcy and we can get you 
more time, even though we can wipe out all your debts. A person can 
then begin to find another place to live, he has no other debt, no old 
debts to pay. He can afford to make the rent payments, and maybe a 
landlord will let him stay.
  Here is another advertisement, from Los Angeles: Stop this eviction, 
from 1 to 6 months. I know under the Senator's amendment it might not 
take quite as long. He would cut that time down. But he said from 1 to 
6. But

[[Page S14687]]

under his amendment I just went through, wouldn't the Senator agree, it 
is at least a month to 6 weeks?
  Mr. FEINGOLD. Mr. President, I ask the Senator, didn't we come to the 
conclusion that we are talking 6 weeks and not 6 months? Would the 
Senator concede that is a big difference, 6 weeks versus 6 months?
  Mr. SESSIONS. Not if you depend on the rent every month, as many 
people do who rent out their garage.
  Mr. FEINGOLD. Isn't there a substantial difference between 6 weeks 
and 6 months of rent? I would say that is significant.
  Mr. SESSIONS. It is significant if you don't get rent for 2 months or 
1 month or 6 months, if you need it.
  The Senator suggests these people are not trying to game the system. 
They are not sophisticated in all of this. They go to lawyers. They 
take advertisements like this. Those advertisements will still be 
there. They tell tenants how to do this. They are shocked when the 
lawyer says, don't pay any more on your credit card. Don't pay any more 
at the bank. Don't pay any more of your debts. Take your next paycheck, 
give it to me, and I will wipe out everything you owe.
  I ask unanimous consent to have printed in the Record these three 
documents.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                           7 MONTHS FREE RENT

                       100% Guaranteed in Writing

       No matter how far you are behind in your rent. We guarantee 
     you can stay in your apt. or house for 2-7 months more 
     without paying a penny!!! Find out how. We can stop the 
     Sheriff or Marshall and get you more time. If the Sheriff or 
     Marshall has been to your home, don't panic CALL US! If you 
     lost in court don't give up. Call us and we'll get you more 
     time.
       Call Now (213) * * * All counties (Orange, Riverside, San 
     Bernardino, Ventura, etc.) are open 24 hours. Call us and 
     we'll give you our toll-free number (800 * * *). If all lines 
     are busy please call (213) * * * for the location nearest 
     you.
                                  ____


                       TENANT ORGANIZATION, INC.

       Dear Tenant, As you know your landlord has filed for your 
     eviction. Chances are you'll have to move! How long until you 
     are forced to move depends on you.
       The TENANT ORGANIZATION can legally stop your eviction for 
     up to 120 days at rock bottom prices. ALL WITHOUT HAVING TO 
     PAY RENT OR APPEAR IN COURT!
       We are not a foundation or a National bureau we are the 
     only TENANT ORGANIZATION in Southern California. Our prices 
     are the lowest with the best service and quality you can 
     find. For example we will prepare and file a Chapter 7 or 13 
     Bankruptcy Petition for only $120. This is a Federal 
     Restraining Order that will delay your eviction for an 
     average of 2 months. That is not all! We have more moves when 
     it comes to prolonging your eviction. more moves than MAGIC 
     JOHNSON!

         Remember the Tenant Organization Can Help You Even If:

     You have lost in Court.
     Attorneys or even Judges order you to move.
     Legal Aid can't help you and says you must move.
     Your situation seems hopeless, JUST CALL!
       A very urgent warning! Beware of strangers showing up at 
     your front door unexpected and uninvited offering a legal 
     service for your money. Usually these con men and rip off 
     artists will claim to be attorneys or sent by the court. If 
     you are approached by any of these people report them to your 
     local police department. Don't become their next victim!
                                  ____


                                QUALITY

                        NEED MORE TIME TO MOVE?

       Public records indicate that you are being SUED in the Los 
     Angeles Municipal Court as a party to an Unlawful Detainer 
     Action.
       California Law requires that you file an ANSWER to the 
     Complaint Within 5 Days of being served by the Landlord or be 
     forcibly evicted from the premises that you now occupy. For 
     as little as $20.00 you can begin to:

                 Stop This Eviction From 1 to 6 Months

       Whether you appear in the Municipal Court or not, there are 
     Federal Laws which will assist you in your efforts to stop 
     this eviction. A Federal Court Restraining Order, which is 
     automatic upon filing, will immediately stop the Municipal 
     Court, all Marshall's or Sheriff's from continuing this 
     eviction.

               Prompt Action in this Matter is Necessary

   Failure to respond to this most urgent matter may result in your 
                          Immediate Eviction.

    For Assistance in filing your answer or obtaining an Automatic 
              Restraining Order Call 24 hr. 7 days a week

  Mr. SESSIONS. One of the things Senator Grassley has done in the 
bill, and the Senator has mentioned, is to provide that you do not have 
to have an attorney in bankruptcy court for most of the actions that 
will take place. This is indeed a good step forward. You would not have 
to have an attorney in this landlord tenant situation. I would suggest 
that for the average small apartment owner who gets a notice that he is 
to stay his eviction procedures, and he has a lawyer who is doing the 
eviction procedures, he is going to ask his lawyer: What is this? What 
can you do to get this stay lifted? The landlord is going to hire a 
lawyer and end up spending several hundred dollars to get this matter 
taken care of, when ultimately, the procedure is such that there will 
be no legal basis for the filing of the complaint in the overwhelming 
number of cases.
  I understand the Senator's concern. I believe this bill, as written, 
will provide all the protections the States have given to tenants. I 
believe we have a responsibility to see they have protections, that 
they can defend their interests in court before being thrown out of 
their apartments.
  And, indeed, that is the law in every State in America today. But I 
do not believe we ought to allow those who file bankruptcy to have 
substantial benefits over those who don't file bankruptcy, who are 
managing somehow, in some way, on the same income, to pay their debts. 
I don't believe they should have a superior advantage. I don't believe 
landlords who are going to lose in this bankruptcy proceeding, no 
telling how many months rent, should be required to fund additional 
rents. If this body wants to pay them to allow people to stay, it is 
OK; otherwise, it is not.
  I yield the floor.

                          ____________________