[Congressional Record Volume 151, Number 28 (Thursday, March 10, 2005)]
[Senate]
[Pages S2420-S2422]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           BANKRUPTCY REFORM

  Mr. DURBIN. Mr. President, for those who do not follow the debate in 
the Senate very closely, this 500-page bill has been the subject of our 
debate and discussion for the last 2 weeks. It is likely to be 
concluded today with a vote, and the vote is likely to be in favor of 
this legislation.
  It is about bankruptcy law. It is something everyone dreads the 
thought of, that you would reach a point in life where you have more 
debts than assets, and finally say: I have to go to court and ask for 
help.
  But bankruptcy is an institution created by Western civilized society 
to respond to a terrible injustice. There was a time in this world when 
if you were deeply in debt, you ended up deeply in jail--debtors' 
prison--put in an unconscionable situation where you could not pay your 
bills and, once in prison, did not have any place to turn.
  We decided that in a more civilized society we would acknowledge the 
fact that through misfortune or miscalculation some people reach a 
point where they do not have enough money to pay their bills. And if 
they are prepared to go into a bankruptcy court, file extensive 
documentation to establish their debt and their assets, the court may 
consider discharging them in bankruptcy. As a result of that discharge, 
people lose most of what they have on Earth, but also walk away from 
their debts and have a chance for a fresh start, for a new day.
  That is something that has been in the law for a long time. The law 
has been amended over the years. We have chapter 7, where you walk out 
of the bankruptcy court with your debts behind you. Chapter 13 is where 
an individual tries to repay, says to the court: I don't want to be 
found to be bankrupt. I am willing to work out with my creditors a 
repayment schedule. That is what chapter 13 does. So you try to take a 
limited amount of money and pay it out over a period of time.
  For years and years the credit card companies and big banks have 
said: We want to change this law. Too many people are going to 
bankruptcy court. The numbers range from 1.3 million to 1.5 million 
each year, but there is no doubt the numbers are going up.
  The credit industry argues: Too many people are in bankruptcy court, 
and as a consequence, we should limit the opportunity for bankruptcy. 
So for almost 10 years they have been pushing for this bill--year after 
year after year.

[[Page S2421]]

Today their prayers will be answered. This bill will pass the Senate. 
It will glide right through the House of Representatives and be signed 
by the President in a hurry. What it will mean is that many of the 
people walking into bankruptcy court are now going to face new hurdles, 
new obstacles, new paperwork, new legal costs to file for bankruptcy, 
and at the end of the day many of them will not have their debts 
erased. Many of them will find they have to continue to keep paying on 
those debts for a long period of time.
  It concerns me because we ought to ask the most basic question: Why 
are more people filing for bankruptcy? Is it the fashionable thing to 
do? I do not think so. Years ago, a member of my staff and her husband 
had a bad business experience. When she came to tell me they were going 
to file for bankruptcy, she was in tears. She was not happy about that 
at all.
  People I have known who have gone through bankruptcy are not proudly 
announcing to their friends: Well, I had a great day in bankruptcy 
court. These are people who are a little embarrassed, a little ashamed 
of what they had to go through. They certainly did not want this to 
happen.
  And why do people end up in that predicament? Well, for a lot of 
reasons. If you look at the No. 1 reason people give for why they go to 
bankruptcy court today, it is because of medical bills. And that stands 
to reason. The cost of medical care in America has gone up dramatically 
year after year. If you are not prepared for a major illness in your 
family, you might face major bills that you will never be able to 
repay. Sometimes the hospital or doctor will write it off and say: I 
know I am never going to collect it, and that is the end of the story. 
But sometimes they will not.
  Sometimes the bills just keep coming in and the bill collectors keep 
calling and the harassment on individuals and their families increases 
to a point where some people say: That is it. I can't do it. I will 
never be able to pay off this debt. And they go into bankruptcy court.
  So here we are in a nation with a health care crisis, in a nation 
where each day fewer people have health insurance, a nation where each 
day the cost of health care is going up, a nation where businesses are 
struggling to keep health insurance on the owners of the business and 
their employees, where labor unions are at their wit's end about how to 
provide the basic benefit package and still increase take-home pay, 
here we are in a certifiable American crisis when it comes to health 
care. And what is the response of your Government? To deal with the 
problem? No, we are going to deal with the victims.
  The victims of today's health care crisis will now go into bankruptcy 
court and face a mountain of paperwork they have to fill out. If they 
don't do it right or they fall into the categories in this bill, they 
are not going to have their debts discharged. They are going to walk 
out of that court as deeply in debt as when they walked in.
  The credit card industry says it is only fair because all these 
people going to bankruptcy court evidence some moral failure in 
America. There is just something wrong today with people and their 
values.
  Excuse me, but being preached to by the credit card industry about 
moral values is a little tough to swallow. This is the same industry 
that in 2003 made record profits. All that plastic we carry in our 
wallets, they are making a bundle off those credit cards--so much so 
that they will inundate anyone who is up and taking nourishment with 
more credit card solicitations. Go home tonight and look in the 
mailbox. Maybe it won't be tonight. Trust me, by tomorrow there will be 
another solicitation for another credit card. And you think to 
yourself: Am I that important that they keep coming to me and offering 
me a credit card? The answer is, sadly, no. They are ready to offer 
credit cards to anything moving.

  In my office one of my attorneys has a little boy who is 3\1/2\ years 
old. Tyler must be a pretty special little baby. He got his first 
credit card solicitation at the age of 3\1/2\. I told that story in 
Rockford, IL, last week, and one of my business friends said: I have 
you on that one. My 9-month-old daughter received a solicitation.
  So here is this industry dumping credit cards on America, oblivious 
to whether the people who are receiving them are good credit risks, 
hoping you will sign up for that credit card, hoping you will pay 16 
percent, 20 percent interest, hoping you will make the minimum monthly 
payment so they will eat you alive with interest payments, and ready to 
accept the possibility that they guessed wrong, ready to accept the 
possibility that you won't be able to pay your bills. They will write 
that off, or at least they did until this bill came along. Now they 
want that credit card debt to trail you for a lifetime. That is what 
this bill is all about.
  You say to yourself: Is it a moral failure in America that has led to 
more bankruptcies? No, it is the lack of health insurance; it is the 
fact that people who worked hard and thought they had the world by the 
tail end up seeing their jobs outsourced when they are 55 years old and 
have nowhere to turn. Those are the realities of what leads people to 
bankruptcy court.
  This bill says an awful lot about the Senate of the United States. It 
is the second most important bill of the Republican leadership. Did 
they bring us a bill to deal with the health care crisis? No. Did they 
bring us a bill to deal with all the jobs being outsourced in America, 
the Tax Code that creates rewards and incentives to send jobs overseas? 
No. Did they deal with a bill to fund our schools? Remember that 
Federal mandate called No Child Left Behind, that unfunded mandate 
President Bush and the Republicans in Congress refused to fund? Did 
they offer a bill to help struggling schools? No.
  What did they come with? They came with the granddaddy of special 
interest bills, this 500-page gift to the credit industry in America. 
So we offered some amendments. We said: If there is going to be a real 
debate, let's have real choices.
  The first amendment I offered said I am going to give you a category 
of bankrupt people I think should get a break from the terrible 
provisions in this bill. The category is the people we salute every 
night on the news, who many of us give speeches praising, who our 
thoughts and prayers are with every day--the men and women in uniform 
serving America. These are men and women who a year and a half ago had 
a nice little restaurant or a nice little business and went to their 
Guard meetings once a month and then were activated and, once 
activated, found out it wasn't for 30 days, it was for 18 months. While 
they were gone, their little business disintegrated, and now they face 
bankruptcy. Where was the moral failure of these soldiers? Where 
was the moral failure of the guardsmen and reservists who volunteered 
to go overseas and fight for my freedom and my home? I don't see any 
moral failure there.

  When we brought the amendment to the floor and said, give these 
servicemen a break, by a vote of 58 to 38, with every Republican voting 
against it, that amendment was defeated by the same Congress that gives 
all of these stirring speeches about how much we love the men and women 
in uniform. Where were they when the men and women in uniform needed a 
vote on this bill? They were AWOL, that is where they were.
  Senator Kennedy said: What about the family in medical crisis? Should 
we not say to them at the end of the day, if you go through bankruptcy 
court, we will protect your home? We will give you a home to go to, and 
not an expensive home, a $150,000 home. You can buy a nice small home 
in Springfield, IL, for $150,000. You get up to Chicago or Washington 
or Boston or New York or Los Angeles, where does $150,000 take you? Not 
very far. But Senator Kennedy said: If it is a medical crisis that 
brought them to bankruptcy, shouldn't at the end of the day they have a 
roof over their heads? Rejected--another virtual partisan rollcall. The 
credit card industry said: No exceptions.
  Bill Nelson of Florida said: What if they steal your identity, run up 
all these bills, take you to court, and you are trying to discharge 
bills you didn't even enter into? Shouldn't you get a break then if 
they have stolen your identity? No, rejected. The credit card industry 
said: Go to court; fight it out in court with your lawyer. We are not 
going to give you that break.
  I am going to offer an amendment, my last amendment, to the relief of

[[Page S2422]]

many on the Republican side. I know they are tired of my amendments and 
tired of hearing me. I am about to lose my voice, so maybe it is time 
to end the debate. But the last amendment is their last chance. Here is 
what the last amendment says: If you are a disabled veteran and if the 
debts that brought you to bankruptcy were primarily incurred while you 
served in the active military, we are going to give you a break in 
bankruptcy court.
  Who are the men and women I am talking about? Come to Bethesda, come 
to Walter Reed, and I will introduce you to them. These are guardsmen 
and reservists, active military, marines, soldiers from our Army, 
sailors who have now gone overseas and who have lost a leg or an arm or 
both hands or suffered a head injury. These are people who gave 
everything we could ask of them for this country. What profiles in 
courage they are. When I go out there, I am just amazed. They are 
fighting to get that prosthetic limb, fighting to get back on their 
feet. Most of them more than anything want to go back and fight with 
their units, but they are headed home. Some of them are headed home to 
a financial situation that is going to be another challenge to them. 
Some of them won't be able to get through it. They are going to file 
for bankruptcy. They are going to ask to maybe put those bitter 
memories of the war behind them and to put their debts behind them and 
give them a chance to start their lives again.
  My last appeal to the Republican side of the aisle, which has 
steadfastly stood in ranks for the credit card industry and has been 
unwilling to stand for our men and women in uniform, is this: For the 
disabled veterans, those who incurred debts while they were at war, can 
you give them a break?
  That is the last amendment I am going to offer. I am glad to have the 
disabled veterans organization of America supporting this amendment. I 
was happy to have all the military groups and families supporting my 
earlier amendment. I hope those who are following this debate on both 
sides of the aisle will consider those families who are affected. They 
have considered the credit card industry. There is a great deal of 
sympathy for the credit industry in the Senate. Our heart goes out to 
these poor people, the credit card industry swamping us with cards 
making billions of dollars. What can we do to help?
  How about a 500-page bill, they say? Any time soon? Sure. It will be 
the second item on the Senate agenda. We will make sure we get this big 
present out of the way so you can put it on your list of 
accomplishments in Congress this year. For the people who will end up 
in bankruptcy court, most of whom never wanted to be there, the 
nightmare just got worse. What you are going to face because of this 
bill is a lot more in terms of obstacles, paperwork, and costs.
  Instead of dealing with the problems that force people into 
bankruptcy, we are going to punish the victims. That is the priority of 
this Congress. It doesn't speak very well for why we are here.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. VOINOVICH. Mr. President, I understand we are in morning 
business.
  The PRESIDING OFFICER. The Senator is correct.

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