I thought people might find Senator Lieberman's reponse to my letter about the bankruptcy bill to be interesting. I told him I was happy that he voted against it but that I doubted his sincerity, considering that he voted for cloture and asked why he did so. It's a form letter that entirely ignores the specific question I asked him (why he voted for cloture), but might interest some people nonetheless. I'm behind in my work and don't have time for real commentary, but the letter's on the flipside.
Thank you for contacting me with your concerns regarding the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 (S.256) which was
introduced by Senator Charles Grassley (R-IA). I am pleased to hear from
you on this issue.
As you may know, the number of bankruptcies has grown exponentially over
the last 25 years. There was one personal bankruptcy for every 336
households in 1980, by 2003, that ratio had sunk to one per every 73
households. Facing such a large number of bankruptcies, credit card
companies and banks lobbied Congress to pass S. 256. This legislation
makes it harder for bankruptcy filers to file under Chapter 7, which
allows filers to discharge all of their debt and forces more of them to
file under chapter 13, which mandates that the debtors commit to a three
to five year repayment plan.
Under S. 256, debtors that earn more than the median state income and are
able to pay 25 percent of their unsecured debt (typically, credit card
debt) may not file for Chapter 7 bankruptcy. Additionally, debtors who
earn less than the median state income may file Chapter 7 only if they are
unable to pay 25 percent of their non-priority unsecured debt; but even in
that case, the court can require the debtor to file under Chapter 13 if it
believes the debtor would be abusing the system by filing Chapter 7. S.
256 also dictates that debtors must undergo credit counseling in the six
months prior to applying for bankruptcy and Chapter 7 filers must attend
money management classes before debts can be discharged. Unfortunately,
this bill passed the Senate over my objections.
In the past, I have supported bankruptcy reform legislation because
previous bills reflected a bipartisan effort to enact a balanced bill for
both debtors and creditors. S. 256 is not a balanced bill. I voted
against this bill because it failed to close troubling loopholes that
protect wealthy debtors, and yet deals harshly with middle- and low-income
Americans facing unforeseen medical expenses or sudden military
deployment. The Senate simply rejected out of hand many worthwhile
amendments that would have protected hard working Americans who find
themselves in dire financial straits through no fault of their own,
including Senator Chris Dodd's (D-CT) amendment to prohibit extensions of
credit to underage consumers, Senator Richard Durbin's (D-IL) amendment to
discourage predatory lending practices, and Senator Charles Schumer's
(D-NY) amendment to prohibit the discharge, in bankruptcy, of debt
resulting from the debtor's unlawful interference with the provision of
lawful goods or services. As a result, I believe this is a seriously
flawed bill, and I am disappointed by its passage.
This legislation is currently pending action in the House of
Representatives. Please be assured that I will continue to be active in
the Senate to ensure a balanced bankruptcy bill for both debtors and
creditors and will keep your specific views in mind should legislation
addressing bankruptcy come before the Senate again in the 109th Congress.
My official Senate web site is designed to be an on-line office that
provides access to constituent services, Connecticut-specific information,
and an abundance of information about what I am working on in the Senate
on behalf of Connecticut and the nation. I am also pleased to let you
know that I have launched an email news update service through my web
site. You can sign up for that service by visiting
http://lieberman.senate.gov and clicking on the "Subscribe Email News
Updates" button at the bottom of the home page. I hope these are
informative and useful.
Thank you again for letting me know your views and concerns. Please
contact me if you have any additional questions or comments about our work
in Congress.