[Congressional Record (Bound Edition), Volume 146 (2000), Part 18]
[Senate]
[Pages 25828-25829]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       THE BANKRUPTCY REFORM BILL

  Mr. KERRY. Mr. President, I strongly believe that reform of our 
bankruptcy laws is necessary. During the 105th and 106th Congress, I 
have supported legislation to reform bankruptcy laws and end the abuse 
of the system. However, I am very disappointed that I am unable to 
support the conference report of the Bankruptcy Reform Bill because I 
believe it is unfair and unbalanced, was completed without appropriate 
consideration by the Minority party, includes an inequitable homestead 
provision and is unfair to many working families.
  I am very concerned that the decision to file for bankruptcy is too 
often used as an economic tool to avoid responsibility for unsound 
business decisions and reckless acts by both individuals and 
businesses. There has been a decline in the stigma of filing for 
bankruptcy and appropriate changes are necessary to ensure that 
bankruptcy is no longer considered a lifestyle choice.
  This legislation includes a number of important reforms which I 
support. I am pleased that the small business provisions originally 
included in the Senate bill have been changed to give small businesses 
adequate time to develop a reorganization plan during bankruptcy 
proceedings. I had previously included an amendment to the Senate bill 
that increased this time for small businesses. I am also pleased that 
the conference report includes my amendment to expand the credit 
committee membership under Chapter 11

[[Page 25829]]

bankruptcies to include small businesses. I believe this will ensure 
better access and information for small businesses creditors. 
Unfortunately, reasonable and necessary reforms were included in a bill 
that on the whole fails to take a balanced approach to bankruptcy 
reform. I had hoped that through a legitimate legislative process we 
would arrive at a compromise that would have ended the abuses but still 
provided our most vulnerable citizens with adequate protections. 
Instead, I believe that the conference report protects wealthy debtors 
by allowing them to use overly broad homestead exemptions to shield 
assets from their creditors. The Senate passed, by a bipartisan vote of 
76-22, an amendment to create a $100,000 nationwide cap on any 
homestead exemption. However, this provision was not included in the 
Conference Report. Instead, the conferees included a meaningless cap 
with a two-year residency requirement that wealthy debtors could easily 
avoid. Moreover, the bill's safe harbor is illusory and will not 
benefit individuals in most need of help. Because the safe harbor is 
based on the combined income of the debtor and the debtor's spouse, 
many single mothers who are separated from their husbands and who are 
not receiving child support will not be able to take advantage of the 
safe harbor provision.
  I am also very disappointed that the conference report does not 
include an amendment offered by Senator Collins and myself, which was 
included in the Senate bill, that would make Chapter 12 of the 
Bankruptcy Code, which now applies to family farmers, applicable for 
fishermen. I believe that this provision would have made bankruptcy a 
more effective tool to help fishermen reorganize effectively and allow 
them to keep fishing while they do so.
  In addition to its failure to protect many consumers, the bill fails 
to require that the credit industry share responsibility for reducing 
the number of bankruptcy cases. It does not require specific 
disclosures on monthly credit card statements that would show the time 
it would take to pay off a balance and the cost of credit if only 
minimum payments are made. It also does nothing to discourage lenders 
from further increasing the debt of consumers who are already 
overburdened with debt.
  Finally, this bill is the result of a conference process that 
violated and deprived the rights of Senators. In October, the House 
appointed conferees for the Bankruptcy Reform Act and without holding a 
conference meeting, the Majority filed a conference report striking 
international security legislation and replacing with a reference to a 
bankruptcy reform bill introduced earlier that same day. This makes a 
mockery of the legislative process and demeans the United States 
Senate.
  I am hopeful that during the 107th Congress, we can develop 
bipartisan legislation that would encourage responsibility and reduce 
abuses of the bankruptcy system.

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