[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Extensions of Remarks]
[Pages 4095-4096]
[From the U.S. Government Publishing Office, www.gpo.gov]



  H.R. 333 PROVIDES RELIEF TO FAMILIES, CONSUMERS, FARMERS, AND SMALL 
                               BUSINESSES

                                 ______
                                 

                           HON. DENNIS MOORE

                               of kansas

                    in the house of representatives

                        Tuesday, March 20, 2001

  Mr. MOORE. Mr. Speaker, I rise to share my support for H.R. 333, the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2001. H.R. 
333 is the culmination of many years of compromise and discussion in 
Congress and among consumer advocates and business representatives. 
This bill is the culmination of efforts to protect families filing 
bankruptcy, family farmers, and small businesses without negatively 
harming responsible borrowers.
  In recent years, the bankruptcy filing rate has increased rapidly, 
with a record high of 1.4 million in 1998. In 2000, over $40 billion 
was discharged through bankruptcies. Retailers pass on the costs of 
losing this money to all consumers by raising prices for goods and 
services. All consumers, regardless of their use of credit, pay for 
these discharged debts. In fact, bankruptcies cost each household in 
America $400 per year.
  Furthermore, creditors are forced to restrict access to credit as 
bankruptcies cost creditors more and more money. This restricted access 
to credit disproportionately affects low-income Americans, who are most 
in need of affordable credit for mortgages and consumer purchases. It 
is more important than ever, given the recent economic downturn, that 
we fight to lower prices for consumers and provide equal access to 
credit to all Americans.
  Mr. Speaker, H.R. 333, fairly addresses the concerns of bankruptcy 
filers, consumers, and creditors. This bill contains a needs-based 
formula that directs filers into chapter 7 or Chapter 13 based on their 
ability to pay. Filers earning less than the national median income are 
not affected by this legislation. Furthermore, if filers earn more than 
the national median income, but if after paying the allowable monthly 
deductions and secured debts payments the filers are unable to pay not 
less than the lesser of 25 percent of non-priority unsecured debt or 
$6,000 (or $100 a month), whichever is greater, or $10,000, they will 
have access to Chapter 7 without qualification. These precautions are 
taken to ensure that those who can afford to pay their debts are 
required to do so. And even if a filer is above the limits, this bill 
protects those who have special circumstances such as a decline in 
income or unexpected medical expenses that can be taken into account 
and preclude moving the filer into Chapter 13.
  All of these provisions are included to ensure that bankruptcy relief 
is available to those who are truly in need, while ending the abuses in 
the system by irresponsible debtors who are capable of repaying their 
debts.
  Furthermore, Mr. Speaker, H.R. 333 includes provisions to protect 
women and children, those individuals who typically have the

[[Page 4096]]

most to lose in bankruptcy proceedings. There has been criticism that 
the bill would put women and children in competition with credit and 
finance companies for scarce resources of the debtor. This is not the 
case, however. Current bankruptcy law puts child support and alimony 
payments in seventh priority. H.R. 333 moves alimony and child support 
to the first priority of debts to be repaid. H.R. 333 also protects 
savings for a child's education and retirement savings. Additionally, 
it strengthens the ability of women to collect marital dissolution 
obligations.
  Also of importance is the provisions that permanently extends Chapter 
12, the agricultural bankruptcy chapter. It also adjusts the 
jurisdictional debt limit so it may be adjusted periodically pursuant 
to the Consumer Price Index and provides different treatment for 
certain tax claims arising from the disposition of a family farm. 
Protection of family farms is especially important given the low 
commodity prices of recent years. Farmers need this protection.
  Finally, H.R. 333 contains a number of provisions that were devised 
to address serious problems in the small business bankruptcy context. 
Small businesses often work with small profit margins and an even 
smaller margin for error. Thus they cannot afford the losses they are 
faced with by bankruptcy abuses.
  Currently, the bankruptcy system significantly harms small businesses 
with endless delays that last for months and even years. H.R. 333 
includes provisions improving the management of bankruptcies by 
providing effective cost and delay reduction by incorporating several 
time-tested techniques.
  Specifically, the bill directs bankruptcy judges to actively manage 
Chapter 11 cases, thereby encouraging debtors and creditors to work 
together to try to move businesses out of bankruptcy, and restore them 
to normal business practice and protecting employees.
  The bill also encourages the development of standard-form plans and 
disclosure statements. Current law requires disclosure statements to be 
drafted from scratch, which greatly contributes to the costs of the 
Chapter 11 process. The use of standard-form plans and disclosure 
statements would free up vital assets that companies could otherwise 
use to help in the reorganization.
  I believe in personal responsibility, and not spending more than you 
make. I also realize, however, that there are circumstances in life 
that prevent honest and hard-working individuals and families from 
getting ahead. A death in the family, divorce, job loss, unexpected 
medical expenses and other events can all contribute financial 
hardships. Our family farmers are facing low commodity prices and other 
unavoidable situations, and their farms should be protected. Small 
businesses should be provided with the ability to get out of bankruptcy 
quickly. We all want to enable these groups to find relief in filing 
for bankruptcy, while ensuring that all consumers are protected. Mr. 
Speaker, I believe that H.R. 333 accomplishes these goals, and I urge 
my colleagues to support this legislation.

                          ____________________