House Passes Bankruptcy Bill 306-108; Senate Leaders Attempting To Get Bill To Floor

The American Bankruptcy Institute reported that on March 1, 2001, the House approved H.R. 333, the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2001” by a vote of 306-108. The final vote came after several hours of predictably impassioned debate and consideration of six amendments.

The American Bankruptcy Institute also reported that just before the final vote, the House defeated a motion by Rep. John Conyers (R-Mich.) to recommit the bill back to the Judiciary Committee, with an amendment to restrict the marketing of credit cards to those under age 21. The House also defeated a Democratic alternative to the bill, by a vote of 162-256.

While H.R. 333 is very similar to S. 220, approved by the Senate Judiciary Committee on February 28, 2001, there are some differences that will have to be reconciled in a House-Senate conference. The Senate Judiciary Committee approved the bankruptcy reform bill (S. 220) by a vote of 10-8. Only one Democrat, Sen. Joseph Biden (D-Del.), joined all Republicans in support on final passage. The committee’s action clears the way for the full Senate to act. The committee considered and adopted six amendments. Those approved included:

The so-called Schumer amendment, as modified, dealing with debts arising from “violations of law relating to the provision of legal goods and services.” Senator Schumer said the new language broadens his previous violence amendment without undermining its effect in preserving the Freedom of Access to Clinic Entrances Act.

Senator Russ Feingold (D-Wis.) offered two chapter 12 amendments, which were adopted: one dealing with the definition of family farms and the other increasing the debt limit from $1.5 million to $3 million.

The committee adopted, by a 10-8 vote, a Diane Feinstein (D-Calif.) amendment to generally protect debtor-tenants from eviction if they are current on their rent payments, post-filing.

The committee also adopted a Leahy-Hatch privacy amendment. Leahy cited the recent Toysmart case in which lists containing private consumer information were up for sale in order to pay creditors. The Leahy-Hatch amendment would protect personal privacy in bankruptcy court by disallowing the sale of personal and private information as an asset.

According to the American Bankruptcy Institute, once the Senate bankruptcy bill arrives on the floor, Democrats will work to make it harder for the wealthy to shield their assets by purchasing expensive homes in states where creditors are barred from seizing homes in bankruptcy actions. The Senate floor debate will likely include amendments insuring that bankrupt fathers continue to meet child support obligations and could also include amendments moderating credit card solicitations. The American Bankruptcy Institute commented that The National Women’s Law Center (NWLC) urged the House to vote against the bankruptcy bill (H.R. 333) because it makes it harder for working families to regain their economic stability and meet their children’s needs, according to a company press release. The NWLC claimed the bill would set up increased competition for resources between parents owed child support and commercial creditors like credit card companies during and after bankruptcy

Senate leaders are still trying to find a way to bring S. 220 to the floor as soon as possible. An effort by Majority Leader Trent Lott (R-Miss.) was blocked by Sen. Paul Wellstone (D-Minn.), who has made it clear that he intends to filibuster the bill. It will take 60 votes to defeat this effort. All 50 Senate Republicans will need 10 Democrats to join them in cutting off the filibuster. Sen. Lott has not yet filed a cloture motion to cut off debate.

This Alert was written by Alan P. Fox, Esq., Shareholder in Capehart Scatchard’s Commercial Group. Should you have questions or like more information, please contact Mr. Fox at 856.914.2056, by fax at 856.235.2786, or by e-mail at afox@capehart.com.

© 2001 Capehart & Scatchard, P.A.

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