Is 2003 the lucky year for bankruptcy reform legislation? When Congress adjourned last November, it was the third time in six years that lawmakers had failed to pass stricter bankruptcy legislation. Weary and tired from the prolonged battle, many key supporters, including Sen. Joseph Biden (D-DE) and industry lobbyists, vowed not to try again in 2003.
But with bankruptcies at record levels, the bill seems destined to return. The legislation still has strong backers in Congress and the White House, and Sen. Charles Grassley (R-IA) has stated that he will introduce a bankruptcy bill this year.
Financial industry officials say reform is necessary because the current law allows people to walk away from debt they have the means to pay. The law would tighten loopholes for the homestead exemption and require people to seek credit counseling before filing for bankruptcy. Proposed amendments include eliminating the five-year waiting period between bankruptcy filings and preventing lenders from marketing credit cards to minors.
Consumer-rights groups, who oppose the legislation, argue that it unfairly hurts low- and middle-income people. They say it also doesn’t require credit card companies to be more responsible and selective when they extend credit.