The bill which Grassley has advanced with Sens. Robert Torricelli of New Jersey, JeffSessions of Alabama, and Joe Biden of Delaware would be the first comprehensive reform of thefederal bankruptcy code since 1978. The legislation addresses irresponsible consumerism, laxbankruptcy laws and lawyer-run bankruptcy mills. It reflects two years of debate on Capitol Hill onhow best to reform the federal code. Sens. Bill Roth of Delaware and Tim Johnson of South Dakotaare co-sponsors of the bi-partisan bill.
"The goal of this reform is to close the loopholes that allow debtors who could repay at leastsome of the money they owe to walk away scot-free. We have worked to achieve a careful balancethat ensures a safety net for people who need a fresh start after a hardship, while also making surethat those who work hard to make ends meet don't face continued increases in the price of consumergoods and services that result from the ever-growing number of bankruptcies filed by consumers,"Grassley said.
In 1999, it is estimated that the number of bankruptcy filings in the United States will reach a record number of bankruptcies for the fourth consecutive year. Grassley said this trend is alarming,especially since the unemployment is also at record lows. He said there's plenty of blame to goaround, including the fact that the stigma of declaring bankruptcy has lessened and that Congressset a bad example with 30 years of deficit spending. Last year, 1.4 million bankruptcies were filed.
During the committee session today, several amendments were adopted to the originalmeasure that was introduced in March. A description of all amendments follows this news releaseon four pages.
Grassley is chairman of the Judiciary subcommittee with jurisdiction over bankruptcy policy. Torricelli is the subcommittee's top Democratic senator.
A separate bankruptcy reform proposal has been introduced in the House of Representativesby Rep. George Gekas of Pennsylvania. He is chairman of the House subcommittee that considersbankruptcy legislation.