The House has passed the bankruptcy bill now. All Republicans voted for it, and most but not all Democrats voted against it. This is a “clean bill” that matches the one approved in the Senate, so there’s no need for a House-Senate Conference. President Bush plans to sign the bill in the next few days.
Not surprisingly, the appraisal of the bankruptcy bill’s value to our nation divides sharply along party lines. Republican James Sensenbrenner says the bill will “make credit cheaper and force Americans to be more responsible in handling credit. “This bill will help restore responsibility and integrity to the bankruptcy system,” he said, “by cracking down on fraudulent, abusive and opportunistic bankruptcy claims.”
Democrat Barbara Lee says “This is a morally bankrupt bill that takes ‘kick ’em when they’re down’ to a whole new level. This is a big-time corporate payoff, drafted with one goal in mind: profit, profit, profit.”
Earlier, Senator Edward M. Kennedy had said of the bill, “This bankruptcy bill is mean-spirited and unfair. It should and will be an embarrassment to anyone who votes for it. It’s a bonanza for the credit card companies, which made $30 billion in profits last year, and a nightmare for the poorest of the poor and the weakest of the weak.”
The bill will force most bankruptcy filers into Chapter 13 – restructuring – instead of Chapter 7 – straight bankruptcy. It will require families to pay for six months of credit counselilng before filing for bankruptcy. Critics charge that some credit counseling centers are really just costly scams that protect creditors more than debtors and cause overall debt to increase rather than decrease.
Among the changes the House rejected from the Democrats was a measure that would have increased protection against identity theft and another that would have restricted the marketing of credit cards to college students.