[Congressional Record Volume 148, Number 152 (Friday, November 22, 2002)]
[Extensions of Remarks]
[Page E2143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CONFERENCE REPORT ON H.R. 333, BANKRUPTCY ABUSE PREVENTION AND CONSUMER 
                         PROTECTION ACT OF 2002

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                               speech of

                          HON. BETTY McCOLLUM

                              of minnesota

                    in the house of representatives

                      Thursday, November 14, 2001

  Ms. McCOLLUM. Mr. Speaker, I rise today in opposition to the 
Conference Report for the ``Bankruptcy Reform'' bill, H.R. 333. This 
legislation will impose new restrictions to prevent working families 
facing financial misfortune from getting back on track. It also does 
nothing to stop the irresponsible and predatory practices of some 
businesses and credit card companies. I support efforts to prevent 
abuse of our bankruptcy system as a financial tool but this legislation 
goes too far in cutting off avenues to relief for working families who 
face unmanageable debt.
  Central to this legislation is a new, inflexible ``means test'' that 
will be imposed on every individual filing for bankruptcy. While judges 
currently have the ability to determine the appropriate relief for 
consumers, this new ``means test'' will eliminate that flexibility and 
prevent all but the most impoverished families from filing for 
bankruptcy under Chapter 7. The implementation of this ``means test'' 
will also be a costly mandate on our bankruptcy court system, which is 
already operating on rudimentary funding.
  I have listened to concerns of bankruptcy judges in my state of 
Minnesota who fundamentally oppose this legislation because of the 
disastrous effect it will have on working families facing financial 
crises. These judges echoed facts that are widely known--that the vast 
majority of individuals who file for bankruptcy are low- and moderate-
income citizens facing crisis situations such as the loss of a job, 
medical emergencies or divorce. The actual number of individuals who 
try to ``game the system'' and escape debts by filing for bankruptcy is 
very low. According to one bankruptcy judge, abusive filings constitute 
only about 2-3 percent of all cases and bankruptcy courts are currently 
able to block about 95 percent of those ``bad faith'' filings by 
converting or dismissing certain cases.
  This legislation would also have a negative impact on the 
availability of quality, affordable representation for families filing 
for bankruptcy. Provisions of this legislation would impose new 
liability standards on bankruptcy attorneys, making them responsible 
for the accuracy of all information given to them by their clients when 
filing a bankruptcy petition. Many attorneys will be apprehensive to 
continue representing clients in bankruptcy cases knowing that they may 
be sanctioned for inaccurate information. Bankruptcy lawyers in 
Minnesota have told me that this will severely decrease the number of 
attorneys willing to provide pro bono services, limiting the ability of 
low-income individuals to obtain quality legal representation.
  I agree that something must be done to curb the number of personal 
bankruptcies that strain our banks, credit unions and responsible 
financial institutions. But we must be equitable in asking everyone--
borrowers and lenders alike--to practice good financial planning. This 
unbalanced legislation unfairly targets consumers and allows 
irresponsible companies to continue extending credit to college 
students and others who are already deep in debt or have had a past 
history of bad credit. For the working families of Minnesota and the 
nation, I cannot support this legislation.

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