[Congressional Record Volume 146, Number 142 (Wednesday, November 1, 2000)]
[Senate]
[Pages S11446-S11450]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           BANKRUPTCY REFORM

  Mr. KENNEDY. Mr. President, I urge the Senate to reject the motion to 
invoke cloture on this flawed legislation. For three years, proponents 
and opponents of this so-called Bankruptcy Reform Act have disagreed 
about the merits of the bill. The credit card industry argues that the 
bill will eliminate fraud and abuse without denying bankruptcy relief 
to Americans who truly need it.
  But scores of bankruptcy scholars, advocates for women and children, 
labor unions, consumer advocates, and civil rights organizations 
believe that the current bill is so flawed that it will do far more 
harm than good.
  Every Member of the Senate must analyze these arguments closely and 
separate the myths from the facts. I believe a fair analysis leads to 
the conclusion that this bankruptcy bill is the credit industry's wish 
list to increase its profits at the expense of working families.
  Proponents of the bankruptcy legislation argue that the current bill 
is an appropriate response to the bankruptcy crisis. But the facts 
indicate the opposite. The crisis is overstated, if it exists at all, 
and is no justification for this sweetheart deal for the credit card 
industry.
  For several years, bankruptcy filings were on the rise. But current 
data reflect a decrease in filings. The so-called bankruptcy crisis has 
reversed itself--without congressional assistance. According to a 
report last month, the personal bankruptcy rate dropped by more than 9 
percent in 1999, and continued to decline at a greater than 6 percent 
annual rate in the first nine months of this year. Bankruptcies are now 
at substantially lower levels than in 1997, 1998, or 1999. There have 
been 138,000 fewer personal bankruptcies in the current year than 
during the corresponding period of 1998, a cumulative two-year decline 
of over 15 percent.
  This decline in personal bankruptcies is consistent with the view 
held by leading economists--the bankruptcy crisis is correcting itself. 
A harsh bankruptcy bill is unnecessary.
  Supporters of the bill also argue that we need tough new legislation 
to eliminate fraud and abuse in the bankruptcy system and to instill 
responsibility in debtors. The argument sounds good, but it masks the 
truth about this excessively harsh and punitive bill.
  The current bill is based on biased studies that have been bought and 
paid for by industry dollars and an industry public relations campaign 
that unfairly characterizes the plight of honest Americans. Supporters 
of a bankruptcy overhaul initially relied on a Credit Research Center 
report in 1997, which estimated that 30 percent of Chapter 7 debtors in 
the sample could pay at least 21 percent of their debts. But, as the 
Congressional General Accounting Office responded, ``the methods used 
in the Center's analysis do not provide a sound basis for generalizing 
the Center report's findings to the . . . national population of 
personal bankruptcy filings.''
  VISA U.S.A. and MasterCard International funded several additional 
studies. One study determined that losses due to personal bankruptcies 
in 1997 totaled more than $44 billion. This study appears to be the 
source of the creditor rhetoric that bankruptcy imposes a hidden tax on 
each American family of $400 every year. But once again, the GAO 
concluded that the study's findings are shaky--at best. As the GAO 
stated, ``we believe the report's estimates of creditor losses and 
bankruptcy system costs should be interpreted with caution.''
  The most recent and unbiased study--completed by the Executive Office 
for the U.S. Trustees--concluded that ``only a small percentage of 
current Chapter 7 debtors have the ability to pay any portion of their 
unsecured debts.'' That's consistent with the conclusion reached by 
others, including Time magazine, which reported that by the time 
individuals and families file for bankruptcy protection, more than 20 
percent of their income before taxes is being used to pay interest and 
fees on their debts. The article goes on to say that ``The notion that 
debtors in bankruptcy court are sitting on many billions of dollars 
that they could turn over to their creditors is a figment of the 
imagination of lenders and lawmakers.''
  We know the specific circumstances and market forces that so often 
push middle class Americans into bankruptcy.
  We know that in recent years, the rising economic tide has not lifted 
all boats. Despite low unemployment, a soaring stock market, and large 
budget surpluses, Wall Street cheers when companies--eager to improve 
profits by down-sizing--lay off workers in large numbers. In 1998, 
layoffs were reported around the country in almost every industry--
9,000 jobs were lost after the Exxon-Mobil merger--5,500 jobs were lost 
after Deutsche Bank acquired Bankers Trust--Boeing laid off 9,000 
workers--Johnson & Johnson laid off 4,100. Kodak has cut 30,000 jobs 
since the 1980s and 6,300 just since 1997.
  Often, when workers lose a good job, they are unable to recover. In a 
study of displaced workers in the early 1990s, the Bureau of Labor 
Statistics reported that only about one-quarter of these laid-off 
workers were working at full-time jobs paying as much as or more than 
they had earned at the job they lost. Too often, laid-off workers are 
forced to accept part-time jobs, temporary jobs, or jobs with fewer 
benefits or no benefits at all.
  Divorce rates have soared over the past 40 years. For better or 
worse, more couples are separating, and the financial consequences are 
particularly devastating for women. Divorced women are four times more 
likely to file for bankruptcy than married women or single men. In 
1999, 540,000 women who head their own households filed for bankruptcy 
to try to stabilize their economic lives. 200,000 of them were also 
creditors trying to collect child support or alimony. The rest were 
debtors struggling to make ends meet. This bankruptcy bill is anti-
woman, and this Republican Congress should be ashamed of its attempt to 
enact it into law.
  Another major factor in bankruptcy is the high cost of health care. 
43 million Americans have no health insurance, and many millions more 
are under-insured. Each year, millions of families spend more than 20 
percent of their income on medical care, and older Americans are hit 
particularly hard. A 1998 CRS Report states that even though Medicare 
provides near-universal health coverage for older Americans, half of 
this age group spend 14 percent or more of their after-tax income on 
health costs, including insurance premiums, co-payments and 
prescription drugs.

  These are the individuals and families from whom the credit card 
industry believes it can squeeze another dime. The industry claims that 
these individuals and families are cheating and abusing the bankruptcy 
system, and that are irresponsibly using their charge cards to live in 
luxury they can't afford.
  These working Americans are not cheats and frauds--but they do 
comprise the vast number of Americans in bankruptcy. Two out of every 
three bankruptcy filers have an employment problem. One out of every 
five bankruptcy filers has a health care problem. Divorced or separated 
people are three times more likely than married couples to file for 
bankruptcy. Working men and women in economic free fall often have no 
choice except bankruptcy. Yet this Republican Congress is bent on 
denying them that safety net.
  This legislation unfairly targets middle class and poor families--and 
it

[[Page S11447]]

leaves flagrant abuses in place. Time and time again, President Clinton 
has told the Republican leadership that the final bill must included 
two important provisions--a homestead provision without loopholes for 
the wealthy, and a provision that requires accountability and 
responsibility from those who unlawfully--and often violently--bar 
access to legal health services. The current bill includes neither of 
these provisions.
  The conference report does include a half-hearted, loop-hole filled 
homestead provision. It will do little to eliminate fraud. With a 
little planning--or in some cases, no planning at all--wealthy debtors 
will be able to hide millions in assets from their creditors. For 
example, Allen Smith of Delaware--a state with no homestead exemption--
and James Villa of Florida--a state with an unlimited homestead 
exemption--were treated differently by the bankruptcy system. One man 
eventually lost his home. The other was able to hide $1.4 million from 
his creditors by purchasing a luxury mansion in Florida.
  The Senate passed a worthwhile amendment to eliminate this inequity, 
but that provision was stripped from the conference report. Surely, a 
bill designed to end fraud and abuse should include a loop-hole free 
homestead provision. The President thinks so. As an October 12, 2000 
letter from White House Chief of Staff John Podesta says, ``The 
inclusion of a provision limiting to some degree a wealthy debtor's 
capacity to shift assets before bankruptcy into a home in a state with 
an unlimited homestead exemption does not ameliorate the glaring 
omission of a real homestead cap.''
  Yet there is no outcry from our Republican colleagues about the 
injustice, fraud, and abuse in these cases. In fact, Governor Bush led 
the fight in Texas to see that rich cheats trying to escape their 
creditors can hide their assets under Texas' unlimited homestead law.
  In 1999, the Texas legislature adopted a measure to opt-out of any 
homestead restrictions passed by Congress. The legislature also 
expanded the urban homestead protection to 10 acres. It allowed the 
homestead to be rented out and still qualify as a homestead. It even 
said that a homestead could be a place of business. This provision 
gives the phrase ``home, sweet home'' new and unfair meaning.
  The homestead loop-hole should be closed permanently. It should not 
be left open just for the wealthy. I wish this misguided bill's 
supporters would fight for such a responsible provision with the same 
intensity they are fighting for the credit card industry's wish list, 
and fighting against women, against the sick, against laid-off workers, 
and against other average individuals and families who will have no 
safety net if this unjust bill passes.
  This legislation flunks the test of fairness. It is a bill designed 
to meet the needs of one of the most profitable industries in America--
the credit card industry. Credit card companies are vigorously engaged 
in massive and unseemly nation-wide campaigns, to hook unsuspecting 
citizens on credit card debt. They sent out 2.87 billion--2.87 
billion--credit card solicitations in 1999. And, in recent years, they 
have begun to offer new lines of credit targeted at people with low 
incomes--people they know cannot afford to pile up credit card debt.
  Supporters of the bill argue that the bankruptcy bill isn't a credit 
card industry bill. They argue that we had votes on credit card 
legislation and some amendments passed and others did not. But, to deal 
effectively and comprehensively with the problem of bankruptcy, we have 
to address the problem of debt. We must ensure that the credit card 
industry doesn't abandon fair lending policies to fatten its bottom 
line and ask Congress to become its federal debt collector.
  Two years ago, the Senate passed good credit card disclosure 
provisions that added some balance to the bankruptcy bill. It's 
disturbing that the provisions in the bill passed by the Senate this 
year were watered down to pacify the credit card industry. Even worse, 
some of the provisions passed by the Senate were stripped from the 
conference report.
  The hypocrisy of this bill is transparent. We hear a lot of pious 
Republican talk about the need for responsibility when average families 
are in financial trouble, but we hear no such talk of responsibility 
when the wealthy credit card companies and their lobbyists are the 
focus of attention.
  The credit card industry and congressional supporters of the bill 
attempt to argue that the bankruptcy bill will help--not harm--women 
and children. That argument is laughable.
  Proponents of the bill say that it ensures that alimony and child 
support will be the number one priority in bankruptcy. That rhetoric 
masks the complexity of the bankruptcy system--but it doesn't hide the 
fact that women and children will be the losers if this bill becomes 
law.
  Under current law, an ex-wife trying to collect support enjoys 
special protection. But under the pending bills, credit card companies 
are given a new right to compete with women and children for the 
husband's limited income after bankruptcy.
  It is true that the bill moves support payments to the first priority 
position in the bankruptcy code. But that only matters in the limited 
number of cases in which the debtor has assets to distribute to a 
creditor. In most cases--over 95 percent--there are no assets, and the 
list of priorities has no effect.

  The claim of ``first priority'' is a sham to conceal the real 
problem--the competition for resources after bankruptcy. This 
legislation creates a new category of debt that cannot be discharged 
after bankruptcy--credit card debt. It will, therefore, create intense 
competition for the former husband's limited income. Under current law, 
he can devote his post-bankruptcy income to meeting his basic 
responsibilities, including his student loans, his tax liability, and 
his support payments for his former wife and their children. But if 
this bill becomes law, one of his so-called ``basic'' responsibilities 
will be a new one--to Visa and MasterCard. We all know what happens 
when women and children are forced to compete with these sophisticated 
lenders-- they always lose.
  As thirty-one organizations that support women and children have 
said, ``Some improvements were made in the domestic support provisions 
in the Judiciary Committee . . . however, even the revised provisions 
fail to solve the problems created by the rest of the bill, which gives 
many other creditors greater claims--both during and after bankruptcy--
than they have under current law.''
  In addition, as 91--91--bankruptcy and commercial law professors 
wrote, ``Granting `first priority' to alimony and support claims is not 
the magic solution the consumer credit industry claims because 
`priority' is relevant only for distributions made to creditors in the 
bankruptcy case itself. Such distributions are made in only a 
negligible percentage of cases. More than 95% of bankruptcy cases make 
no distributions to any creditors because there are no assets to 
distribute. Granting women and children first priority for bankruptcy 
distributions permits them to stand first in line to collect nothing.''
  Based on the discredited bankruptcy studies, creditors also argue 
that ``no one will be denied bankruptcy protection. The ten percent of 
filers with the highest incomes and the lowest relative debt would be 
required to repay a portion of what they owed and the balance would be 
discharged, just as it is under current law.'' That's another credit 
card industry myth.
  There is no doubt that this legislation will be harmful to working 
families who have fallen on hard times--families like those described 
in a Time magazine article earlier this year.
  That article discussed the financial difficulties of the Trapp 
family, whom I had the privilege of meeting several months ago. They 
are not wealthy cheats trying to escape from their financial 
responsibilities. They are a middle class family engulfed in debt, 
because of circumstances beyond their control. Like half of all 
Americans who file for bankruptcy, the Trapp family had massive medical 
expenses--over $124,000 in doctors' bills that their insurance didn't 
cover.
  The plight of the Trapp family is similar to that of many other 
American families with serious illness and injury. The combination of a 
major medical problem and a job loss pushed Maxean Bowen--a single 
mother--into bankruptcy. She was a social worker in

[[Page S11448]]

the foster-care system in New York City when she developed a painful 
condition in both feet that made her job, which required house calls, 
impossible. As a result, she had to give up her work and go on the 
unemployment rolls. Her income fell by 50 percent. She had to borrow 
from relatives, and she used her credit cards to make ends meet. Like 
so many others in similar situations, she believed that she would soon 
recover and be able to pay her debts. But, like thousands who file for 
bankruptcy, even when Maxean was able to work again, she owed far more 
than she could repay.
  Maxean tried paying her creditors a few hundred dollars when 
possible, but it wasn't enough to keep her bills from piling up because 
of interest charges and late-payment fees. She said she was ``going 
crazy.''
  Some of my colleagues have argued that Maxean Bowen, Charles and Lisa 
Trapp, and others featured in the Time magazine article wouldn't be 
subject to the harsh provisions in the bankruptcy bill before us today. 
But, although the conference report now includes a ``means test safe 
harbor'' for the poorest families, a careful, objective analysis 
demonstrates that all Americans would be affected by the provisions in 
the bill.
  For example, proponents of the bill argue that the Trapp family would 
not be affected by the means test because their current income is below 
the state median income. That's not true. Before Mrs. Trapp left her 
job, the family's annual income was $83,000 a year or $6,900 a month. 
Under the bill, the Trapp family's previous six months' income would be 
averaged, so that they would have an assumed monthly income of about 
$6,200--above the state median--even though their actual monthly gross 
income at the time of filing was $4,800.
  Based on the fictitious income assumed by the bankruptcy legislation, 
the Trapp family would be subject to the means test. And the means test 
formula--using the IRS standards--would assume that the Trapps have the 
ability to repay more than their actual income would allow.
  Similarly, although the safe harbor provision would protect Maxean 
Bowen from the means test, other substantive and procedural provisions 
in the bill would apply to her. Maxean didn't have the money to pay her 
bankruptcy attorney and had to obtain financial assistance from 
relatives. If this legislation becomes law, the new requirements may 
make bankruptcy relief prohibitive.
  The individuals and families featured in the article are well aware 
of the distortions and misrepresentations of their cases by defenders 
of this harsh Republican bill and by apologists for the credit card 
industry. The outraged response by these debtors is eloquent and 
powerful. As they have emphatically replied,

       During the last year, each of us declared bankruptcy. It 
     was one of the most difficult decisions any of us had to 
     make, coming at the darkest hours in our lives. We saw 
     no other way to stabilize our economic situations. Each of 
     our families is now on the long path of trying to right 
     ourselves financially . . . We have read the statements 
     you have made about our cases on the floor of the Senate 
     and in Mr. Gekas' letter to Time. We deeply resent the 
     fact that you have misrepresented our cases to the 
     American public. Contrary to what you have stated, each of 
     us would have been severely affected by your bankruptcy 
     bill.

  Finally, proponents of the bill argue that it will help small 
businesses. Again, this is another credit card industry myth.
  According to the Administrative Office of the Courts, business 
bankruptcies represented 2.9 percent of all filings in 1999. Since June 
1996, those filings have declined by over 30 percent--30 percent. The 
relatively low number of business bankruptcy filings and the fact that 
filings are decreasing indicate that drastic changes in the law are 
unnecessary.
  This bankruptcy reform bill isn't based on any serious business need. 
In fact, its overhaul of Chapter 11 will hurt--rather than help--small 
businesses. Chapter 11 was enacted to serve the interests of business 
debtors, creditors, and the other constituencies affected by business 
failures--particularly the employees. A principal goal of Chapter 11 is 
to encourage business reorganization in order to preserve jobs. 
Supporters of the bill ride roughshod over this important goal. They 
create more hurdles, additional costs, and a rigid, inflexible 
structure for small businesses in bankruptcy. As a result, fewer small 
business creditors will be paid, and more jobs will be lost.
  This fundamental defect led AFL-CIO President John Sweeney to write, 
``The Bankruptcy Reform Act of 2000 is an attack on working families. 
It will undermine a critical safety net for both families and 
financially vulnerable businesses and their workers. Businesses filing 
bankruptcy cases would be required to follow stringent new rules which 
create significant substantive and procedural barriers to 
reorganization and therefore place jobs at risk. Costly, unnecessary, 
and inflexible procedures will increase the risk that small businesses 
will be unable to reorganize. The bill also threatens jobs in 
significant real estate enterprises and retailers.''
  As I mentioned earlier, a large number of professors of bankruptcy 
and commercial law across the country have written to us to condemn 
this bill and to urge the Senate not to approve it. As their letter 
eloquently states in its conclusion:

       These facts are unassailable: H.R. 2415 forces women to 
     compete with sophisticated creditors to collect alimony and 
     child support after bankruptcy. H.R. 2415 makes it harder for 
     women to declare bankruptcy when they are in financial 
     trouble. H.R. 2415 fails to close the glaring homestead 
     loophole and permits wealthy debtors to hide assets from 
     their creditors. We implore you to look beyond the distorted 
     ``facts'' peddled by the credit industry. Please do not pass 
     a bill that will hurt vulnerable Americans, including women 
     and children.

  It is clear that the bill before us is designed to increase the 
profits of the credit card industry at the expense of working families. 
If it becomes law, the effects will be devastating. The Senate should 
reject this defective bankruptcy bill and the cynical attempt by the 
Republican leadership to pass it on the last day of this Congress. This 
bill is bad legislation. It eminently deserves the veto it will receive 
if it passes.
  I urge the Senate to reject this cloture motion, and to reject this 
bill. I ask unanimous consent that the letter from the 91 law 
professors I mentioned be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                 October 30, 2000.

      Re: The Bankruptcy Reform Act Conference Report (H.R. 2415)

       Dear Senators: We are professors of bankruptcy and 
     commercial law. We have been following the bankruptcy reform 
     process with keen interest. The 91 undersigned professors 
     come from every region of the country and from all major 
     political parties. We are not a partisan, organized group, 
     and we have no agenda. Our exclusive interest is to seek the 
     enactment of a fair and just bankruptcy law, with appropriate 
     regard given to the interests of debtors and creditors alike. 
     Many of us have written before to express our concerns about 
     the bankruptcy legislation, and we write again as yet another 
     version of the bill comes before you. This bill is deeply 
     flawed, and we hope the Senate will not act on it in the 
     closing minutes of this session.
       In a letter to you dated September 7, 1999, 82 professors 
     of bankruptcy law from across the country expressed their 
     grave concerns about some of the provisions of S. 625, 
     particularly the effects of the bill on women and children. 
     We wrote again on November 2, 1999, to reiterate our 
     concerns. We write yet again to bring the same message; the 
     problems with the bankruptcy bill have not been resolved, 
     particularly those provisions that adversely affect women and 
     children.
       Notwithstanding the unsupported claims of the bill's 
     proponents, H.R. 2415 does not help women and children. 
     Thirty-one organizations devoted exclusively to promoting the 
     best interests of women and children continue to oppose the 
     pending bankruptcy bill. The concerns expressed in our 
     earlier letters showing how S. 625 would hurt women and 
     children have not been resolved. Indeed, they have not even 
     been addressed.
       First, one of the biggest problems the bill presents for 
     women and children was stated in the September 7, 1999, 
     letter: ``Women and children as creditors will have to 
     compete with powerful creditors to collect their claims after 
     bankruptcy.''
       This increased competition for women and children will come 
     from many quarters: from powerful credit card issuers, whose 
     credit card claims increasingly will be excepted from 
     discharge and remain legal obligations of the debtor after 
     bankruptcy; from large retailers, who will have an easier 
     time obtaining reaffirmations of debt that legally could be 
     discharged; and from creditors claiming they hold security, 
     even when the alleged collateral is virtually worthless. None 
     of the changes made to S. 625 and none being proposed in H.R. 
     2415 addresses these

[[Page S11449]]

     problems. The truth remains: if H.R. 2415 is enacted in its 
     current form, women and children will face increased 
     competition in collecting their alimony and support claims 
     after the bankruptcy case is over. We have pointed out this 
     difficulty repeatedly, but no change has been made in the 
     bill to address it.
       Second, it is a distraction to argue--as do advocates of 
     the bill--that the bill will ``help'' women and children and 
     that it will ``make child support and alimony payments the 
     top priority--no exceptions.'' As the law professors pointed 
     out in the September 7, 1999, letter: ``Giving `first 
     priority' to domestic support obligations does not address 
     the problem.''
       Granting ``first priority'' to alimony and support claims 
     is not the magic solution the consumer credit industry claims 
     because ``priority'' is relevant only for distributions made 
     to creditors in the bankruptcy case itself. Such 
     distributions are made in only a negligible percentage of 
     cases. More than 95% of bankruptcy cases make NO 
     distributions to any creditors because there are no assets to 
     distribute. Granting women and children a first priority for 
     bankruptcy distributions permits them to stand first in line 
     to collect nothing.
       Women's hard-fought battle is over reaching the ex-
     husband's income after bankruptcy. Under current law, child 
     support and alimony share a protected post-bankruptcy 
     position with only two other recurrent collectors of debt--
     taxes and student loans. The credit industry asks that credit 
     card debt and other consumer credit share that position, 
     thereby elbowing aside the women trying to collect on their 
     own behalf. The credit industry carefully avoids discussing 
     the increased post-bankruptcy competition facing women if 
     H.R. 2415 becomes law. As a matter of public policy, the 
     country should not elevate credit card debt to the preferred 
     position of taxes and child support. Once again, we have 
     pointed out this problem repeatedly, and nothing has been 
     changed in the pending legislation to address it.
       If addition to the concerns raised on behalf of the 
     thousands of women who are struggling now to collect alimony 
     and child support after their ex-husband's bankrupticies, we 
     also express our concerns on behalf of the more than half a 
     million women heads of household who will file for bankruptcy 
     this year alone. As the heads of the economically most 
     vulnerable families, they have a special stake in the pending 
     legislation. Women heads of households are now the largest 
     demographic group in bankruptcy, and according to the credit 
     industry's own data, they are the poorest. The provisions in 
     this bill, particularly the many provisions that apply 
     without regard to income, will fall hardest on them. Under 
     this bill, a single mother with dependent children who is 
     hopelessly insolvent and whose income is far below the 
     national median income would have her bankruptcy case 
     dismissed if she does not present copies of income tax 
     returns for the past three years--even if those returns are 
     in the possession of her ex-husband. A single mother who 
     hoped to work through a chapter 13 payment plan would be 
     forced to pay every penny of the entire debt owed on almost 
     worthless items of collateral, such as used furniture or 
     children's clothes, even if it meant that successful 
     completion of a repayment plan was impossible.
       Finally, when the Senate passed S. 625, we were hopeful 
     that the final bankruptcy legislation would include a 
     meaningful homestead provision to address flagrant abuse in 
     the bankruptcy system. Instead, the conference report 
     retreats from the concept underlying the Senate-passed 
     homestead amendment.
       The Homestead provision in the conference report will allow 
     wealthy debtors to hide assets from their creditors.
       Current bankruptcy law yields to state law to determine 
     what property shall remain exempt from creditor attachment 
     and levy. Homestead exemptions are highly variable by state, 
     and six states (Florida, Iowa, Kansas, South Dakota, Texas, 
     Oklahoma) have literally unlimited exemptions while twenty-
     two states have exemptions of $10,000 or less. The variation 
     among states leads to two problems--basic inequality and 
     strategic bankruptcy planning. The only solution is a dollar 
     cap on the homestead exemption. Although variation among 
     states would remain, the most outrageous abuses--those in the 
     multi-million dollar category--would be eliminated.
       The homestead provision in the conference report does 
     little to address the problem. The legislation only requires 
     a debtor to wait two years after the purchase of the 
     homestead before filing a bankruptcy case. Well-counseled 
     debtors will have no problem timing their bankruptcies or 
     tying-up the courts in litigation to skirt the intent of this 
     provision. The proposed change will remind debtors to buy 
     their property early, but it will not deny anyone with 
     substantial assets a chance to protect property from their 
     creditors. Furthermore, debtors who are long-time residents 
     of states like Texas and Florida will continue to enjoy a 
     homestead exemption that can shield literally millions of 
     dollars in value.
       These facts are unassailable: H.R. 2415 forces women to 
     compete with sophisticated creditors to collect alimony and 
     child support after bankruptcy. H.R. 2415 makes it harder for 
     women to declare bankruptcy when they are in financial 
     trouble. H.R. 2415 fails to close the glaring homestead 
     loophole and permits wealthy debtors to hide assets from 
     their creditors. We implore you to look beyond the distorted 
     ``facts'' peddled by the credit industry. Please do not pass 
     a bill that will hurt vulnerable Americans, including women 
     and children.
           Thank you for your consideration.
         Peter A. Alces, College of William and Mary; Peter C. 
           Alexander, The Dickinson School of Law, Penn State 
           University; Thomas B. Allington, Indiana University 
           School of Law; Allan Axelrod, Rutgers Law School; 
           Douglas G. Baird, University of Chicago Law School; 
           Laura B. Bartell, Wayne State University Law School; 
           Larry T. Bates, Baylor Law School; Andrea Coles Bjerre, 
           University of Oregon School of Law; Susan Block-Lieb, 
           Fordham University School of Law; Amelia H. Boss, 
           Temple University School of Law; William W. Bratton, 
           The George Washington University Law School; Jean 
           Braucher, University of Arizona; Ralph Brubaker, Emory 
           University School of Law.
         Mark E. Budnitz, Georgia State University; Daniel J. 
           Bussel, UCLA School of Law; Arnold B. Cohen, Villanova 
           University School of Law; Marianne B. Culhane, 
           Creighton Law School; Jeffrey Davis, University of 
           Florida Law School; Susan DeJarnatt, Temple University 
           School of Law; Paulette J. Delk, Cecil C. Humphreys 
           School of Law, The University of Memphis; A. Mechele 
           Dickerson, William & Mary Law School; Thomas L. 
           Eovaldi, Northwestern University School of Law; David 
           G. Epstein, University of Alabama Law School; 
           Christopher W. Frost, University of Kentucky, College 
           of Law; Dale Beck Furnish, College of Law, Arizona 
           State University; Karen M. Gebbia-Pinetti, University 
           of Hawaii School of Law; Nicholas Georgakopoulos, 
           University of Connecticut School of Law visiting 
           Indiana University School of Law; Michael A. Gerber, 
           Brooklyn Law School; Marjorie L. Girth, Georgia State 
           University College of Law; Ronald C. Griffin, Washburn 
           University School of Law; Professor Karen Gross, New 
           York Law School; Matthew P. Harrington, Roger Williams 
           University; Kathryn Heidt, University of Pittsburgh 
           School of Law; Joann Henderson, University of Idaho 
           College of Law; Frances R. Hill, University of Miami 
           School of Law; Ingrid Hillinger, Boston College; Adam 
           Hirsch, Florida State University; Margaret Howard, 
           Vanderbilt University Law School; Sarah Jane Hughes, 
           Indiana University School of Law; Edward J. Janger, 
           Broklyn Law School.
         Lawrence Kalevitch, Shepard Broad Law Center, Nova 
           Southeastern University; Allen Kamp, John Marshall Law 
           School; Kenneth C. Kettering, New York Law School; 
           Lawrence King, New York University School of Law; 
           Kenneth N. Klee, University of California at Los 
           Angeles School of Law; Don Korobkin, Rutgers-Camden 
           School of Law; John W. Larson, Florida State 
           University; Robert M. Lawless, University of Missouri-
           Columbia; Leonard J. Long, Quinnipiac University School 
           of Law; Professor Lynn LoPucki, University of 
           California Law School; Lois R. Lupica, University of 
           Maine School of Law; William H. Lyons, College of Law, 
           University of Nebraska; Bruce A. Markell, William S. 
           Boyd School of Law, UNLV; Nathalie Martin, University 
           of New Mexico School of Law; Judith L. Maute, 
           University of Oklahoma Law Center; Juliet Moringiello, 
           Widener University School of Law; Jeffrey W. Morris, 
           University of Dayton School of Law; Spencer Neth, Case 
           Western Reserve University; Gary Neustadter, Santa 
           Clara University School of Law; Nathaniel C. Nichols, 
           Widener at Delaware; Scott F. Norberg, University of 
           California, Hastings College of the Law; Dennis 
           Patterson, Rutgers-Camden School of Law; Dean Pawlowic, 
           Texas Tech University School of Law; Lawrence Ponoroff, 
           Tulane Law School; Nancy Rappoport, University of 
           Houston College of Law; Doug Rendleman, Washington and 
           Lee Law School; Alan N. Resnick, Hofstra University 
           School of Law.
         Steven L. Schwarcz, Duke Law School; Alan Schwartz, Yale 
           University; Charles J. Senger, Thomas M. Cooley Law 
           School; Stephen L. Sepinuck, Gonzaga University School 
           of Law; Charles Shafer, University of Baltimore Law 
           School; Melvin G. Shimm, Duke University Law School; 
           Ann C. Stilson, Widener University School of Law; 
           Charles J. Tabb, University of Illinois; Walter 
           Taggert, Villanova University Law School; Marshall 
           Tracht, Hofstra Law School; Bernard Trujillo, U. 
           Wisconsin Law School; Frederick Tung, University of San 
           Francisco School of Law; William T. Vukowich, 
           Georgetown University Law Center; Thomas M. Ward, 
           University of Maine School of Law; Elizabeth Warren, 
           Harvard Law School; John Weistart, Duke University 
           School of Law; Elaine A. Welle, University of Wyoming, 
           College of Law; Jay L. Westbrook, University of Texas 
           School of Law; William C. Whitford, Wisconsin Law 
           School; Mary Jo Wiggins, University of San Diego Law 
           School; Jane Kaufman Winn,

[[Page S11450]]

           Southern Methodist University; School of Law; Peter 
           Winship, SMU School of Law; Zipporah B. Wiseman, 
           University of Texas School of Law; William J. Woodward, 
           Jr., Temple University.

  Mr. GRASSLEY. Mr. President, we are about to vote on cloture on the 
bankruptcy bill. I urge my colleagues to vote for cloture.
  The conference committee that produced this Bankruptcy Conference 
Report had an even 3-3 ratio. Obviously with this ratio, Democrats on 
the conference held an absolute veto over the bankruptcy bill. But here 
we are voting on a conference report that has the support of conferees 
on both sides of the aisle.
  What's at stake with this vote?
  If you vote ``no'' on cloture you are voting against bankruptcy 
protections for family farmers.
  If you vote ``no'' on cloture you are voting against targeted capital 
gains tax relief for family farmers in bankruptcy.
  If you vote ``no'' on cloture you are voting against a ``Patients' 
Bill of Rights'' for residents of bankrupt nursing homes.
  If you vote ``no'' on cloture you are voting against provisions that 
Federal Reserve Chairman Alan Greenspan and Treasury Secretary Larry 
Summers say are crucial for protecting our financial markets.
  There's a lot at stake with this vote. Let's vote for farmers. Let's 
vote for a ``Patients' Bill of Rights'' for residents of bankrupt 
nursing homes. Let's vote to protect our financial markets. Let's vote 
to protect our prosperity.
  I urge my colleagues to vote for cloture.
  Mr. LOTT. I believe we are ready to proceed to the vote.

                          ____________________