To combat nursing home fraud and abuse, increase protections for victims of telemarketing fraud, enhance safeguards for pension plans and health care benefit programs, and enhance penalties for crimes against seniors, and for other purposes.
To amend title 11, United States Code, to provide for family fishermen, and to make chapter 12 of title 11, United States Code, permanent.
Mr. President, today I am introducing a bill to make reorganization under Chapter 12 of the Bankruptcy Code
applicable to family fishermen. In brief, the bill would allow family fishermen the opportunity to apply for the protections of
reorganization in bankruptcy and provide to them the same protections and terms as those granted the family farmer who enters
bankruptcy.
THE FISHERMEN'S BANKRUPTCY PROTECTION ACT
[Begin insert]
Ms. COLLINS. Mr. President, today I am introducing a bill to make reorganization under Chapter 12 of the Bankruptcy Code
applicable to family fishermen. In brief, the bill would allow family fishermen the opportunity to apply for the protections of
reorganization in bankruptcy and provide to them the same protections and terms as those granted the family farmer who enters
bankruptcy.
Like many Americans, I'm appalled by those who live beyond their means, and use the bankruptcy code as a tool to cure their
self-induced financial ills. I have supported and will continue to support alterations to the bankruptcy code that ensure the
responsible use of its provisions. All consumers bear the burden of irresponsible debtors who abuse the system. Therefore, I
believe bankruptcy should remain a tool of last resort for those in severe financial distress.
As those familiar with the bankruptcy code know, business reorganization in bankruptcy is a different creature than the forgiveness
of debt traditionally associated with bankruptcy. Reorganization embodies the hope that by providing business a break from
creditors, and allowing debt to be adjusted, the business will have an opportunity to get back on sound financial footing and thrive.
In that vein, Chapter 12 was added to the bankruptcy code in 1986 by the Senator from Iowa, Mr. Grassley, to provide for
bankruptcy reorganization of the family farm and to give family farmers a `fighting chance to reorganize their debts and keep their
land'.
To provide the `fighting chance' envisioned by the authors of Chapter 12, Congress provided a distinctive set of substantive and
procedural rules to govern effective reorganization of the family farm. In essence, Chapter 12 was a recognition of the unique
situation of family owned businesses and the enormous value of the family farmer to the American economy and our cultural
heritage.
Chapter 12 was modeled on bankruptcy Chapter 13 which governs the reorganization of individual debt. However, to address the
unique problems encountered by farmers, Chapter 12 provided for significant advantages over the standard Chapter 13 filer. These
advantages include a longer period of time to file a plan for relief, greater flexibility for the debtor to modify the debts secured by
their assets, and alteration of the statutory time limit to repay secured debts. The Chapter 12 debtor is also given the freedom to
sell off parts of his or her property as part of a reorganization plan.
Unlike Chapter 13, which applies solely to individuals, Chapter 12 can apply to individuals, partnerships or corporations which fall
under a $1.5 million debt threshold--a recognition of the common use of incorporation even among small family held farms.
Without getting too technical, I should also mention that Chapter 12 also contains
significant advantages over corporate reorganization which is governed by Chapter 11 of the Bankruptcy Code. For example,
Chapter 12 creditors generally may not challenge a payment plan that is approved by the Court.
Chapter 12 has been considered an enormous success in the farm community. According to a recent University of Iowa study, 74
percent of family farmers who filed Chapter 12 bankruptcy are still farming, and 61 percent of farmers who went through Chapter
12 believe that Chapter 12 was helpful in getting them back on their feet.
Recognizing its effectiveness, my bill proposes that Chapter 12 should be made a permanent part of the bankruptcy code, and
equally important, my bill would extend Chapter 12's protections to family fishermen.
In my own state of Maine, fishing is a vital part of our economy and our way of life. The commercial fishing industry is made up of
proud and fiercely independent individuals whose goal is simply to preserve their business, family income and community.
In my opinion, for too long the fishing industry has been treated like an oddity, rather than a business through which courses the
life's blood of families and communities. This bill attempts to bridge that gap and afford fishermen the protection of business
reorganization as it is provided to family farmers.
There are many similarities between the family farmer and the family fisherman. Like the family farmer, the fisherman should not
only be respected as a businessman, but for his or her independence in the best tradition of our democracy. Like farmers,
fishermen face perennial threats from nature and the elements, as well as changes to laws which threaten their existence. Like
family farmers, fishermen are not seeking special treatment or a hand-out from the federal government, they seek only `the fighting
chance' to remain afloat so that they can continue in their way of life.
Although fishermen do not seek special treatment from the government, they play a special role in seafaring communities on our
coasts, and they deserve protections granted others who face similar, often unavoidable, problems. Fishermen should not be denied
the bankruptcy protections accorded to farmers solely because they harvest the sea and not the land.
I have proposed not only to make Chapter 12 a permanent part of the bankruptcy code, but also to apply its provisions to the family
fisherman. The bill I have proposed mirrors Chapter 12 with very few exceptions. Its protections are restricted to those fishermen
with regular income who have total debt less than $1.5 Million, the bulk of which, eighty percent, must stem from commercial
fishing. Moreover, families must rely on fishing income for these provisions to apply.
Those same protections and flexibility we grant to farmers should also be granted to the family fisherman. By making this modest
but important change to the bankruptcy code, we will express our respect for the business of fishing, and our shared wish that this
unique way of life should continue
To amend the Truth in Lending Act to provide for enhanced information regarding credit card balance payment terms and conditions, and to provide for enhanced reporting of credit card solicitations to the Board of Governors of the Federal Reserve System and to Congress, and for other purposes.
To amend title 11, United States Code, and for other purposes.
To amend title 11, United States Code, and for other purposes.
S. 586. A bill to amend title 11, United States Code, to limit the value of certain real property that a debtor may elect to exempt under State or local law, and for other purposes to the Committee on the Judiciary.
By Mr. KOHL (for himself, and Mr. Sessions):
S. 586. A bill to amend title 11, United States Code, to limit the
value of certain real property that a debtor may elect to exempt under
State or local law, and for other purposes to the Committee on the
Judiciary.
[Page: S2577]
Mr. KOHL. Mr. President, I rise today, with Senator
Sessions, to introduce the bipartisan Bankruptcy Abuse
Reform Act of 1999, legislation which addresses a serious problem that
threatens Americans' confidence in our bankruptcy laws. The measure
would cap at $100,000 the State homestead exemption that an individual
filing for personal bankruptcy can claim. It passed the Senate last year
when it was included in the Consumer Bankruptcy Reform Act of 1998 (H.R.
3150), and I hope that we can all support this measure again this year.
The goal of our measure is simple but vitally important: to make sure
that our Bankruptcy Code is more than just a beachball for crooked
millionaires who want to hide their assets.
Let me tell you why this legislation is critically needed. In chapter
7 Federal personal bankruptcy proceedings, the debtor is allowed to
exempt certain possessions and interests from being used to satisfy his
outstanding debts. One of the chief things that a debtor seeks to
protect is his home, and I agree with that in principle. Few question
that debtors should be able to keep a roof over their heads. But, in
practice, this homestead exemption has become a source of great abuse.
Under section 522 of the Code, a debtor may opt to exempt his home
according to local, State, or Federal bankruptcy provisions. The Federal
exemption allows the debtor to shield up to $15,000 of value in his
house. The State exemptions vary tremendously: some States do not allow
the debtor to exempt any of his home's value, while a handful of states
set no ceiling and allow an unlimited exemption. The vast majority of
states have exemptions under $40,000.
Our proposal would amend Section 522 to cap State exemptions so that
no debtor could ever exempt more than $100,000 of the value of his home.
Mr. President, in the past few years, the ability of debtors to use
State homestead exemptions has led to flagrant abuses of the Bankruptcy
Code. Multimillionaire debtors have moved to one of the states with
unlimited exemptions--most often Florida or Texas--bought
multi-million-dollar houses, and continued to live like kings even after
declaring bankruptcy. This shameless manipulation of the Bankruptcy Code
cheats honest creditors out of compensation and rewards only those who
can `game' the system. Oftentimes, the creditor who is robbed is the
American taxpayer. In recent years, S&L swindlers, convicted insider
trader convicts, and others have managed to protect their ill-gotten
gains through this loophole.
The owner of a failed Ohio S&L, who was convicted of securities
fraud, wrote off most of $300 million in bankruptcy claims, but still
held on to the multimillion dollar ranch he bought in Florida. A
convicted Wall Street financier filed bankruptcy while owing at least
$50 million in debts and fines, but still kept his $5 million Florida
mansion with 11 bedrooms and 21 bathrooms. And just last year, movie
star Burt Reynolds wrote off over $8 million in debt through bankruptcy,
but still held onto his $2.5 million Florida estate. These deadbeats
stay wealthy while legitimate creditors--including the U.S.
Government--get the short end of the stick.
Simply put, the current practice is grossly unfair and contravenes
the intent of our laws: People are supposed to get a fresh start, not a
head start, under the Bankruptcy Code.
Mr. President, the legislation that I have introduced today is
simple, effective and straightforward. It caps the homestead exemption
at $100,000, which is far more than estimated median home equity of
people in bankruptcy. It is endorsed by the National Bankruptcy Review
Commission. And it will protect middle class Americans while preventing
the abuses that are making the middle class question the integrity of
our laws--the abuses the average American taxpayer is paying for out of
pocket.
Indeed, it is even generous to debtors. Less than ten states have a
homestead exemption that exceeds $100,000. More than two-thirds of
states cap the exemption at $40,000 or less. My own home state of
Wisconsin has a $40,000 exemption and that, in my opinion, is more than
sufficient.
Mr. President, this proposal is an effort to make our bankruptcy laws
more equitable. I urge my colleagues to support this important measure.
END
To amend title 11, United States Code, to limit the value of certain real and personal property that a debtor may elect to exempt under State or local law, and for other purposes.
To amend the Truth in Lending Act to protect consumers from certain unreasonable practices of creditors which result in higher fees or rates of interest for credit cardholders, and for other purposes.
Mr. President, I rise today on behalf of myself and my colleague from Maryland, Senator Mikulski, to introduce legislation that is absolutely critical to the administration of justice and the economy in our State of Maryland.
(Presented by the American Bankruptcy Institute)
The following is an excerpt from the Congressional Record, February 24, 1999:
Mr. SARBANES. Mr. President, I rise today on behalf of myself and my colleague from Maryland, Senator Mikulski, to introduce legislation that is absolutely critical to the administration of justice and the economy in our State of Maryland. This legislation provides for four additional bankruptcy judges for the federal judicial District of Maryland.
This bill represents only the most recent of our efforts to strengthen Maryland's federal bankruptcy court. Early in the 105th Congress, we introduced legislation adding two additional bankruptcy judges for the District of Maryland, in line with the then-pending request of the Judicial Conference. The House of Representatives followed suit in summer 1997, passing legislation that authorized these two judges, in addition to other new bankruptcy judgeships throughout the country. Last year, the Senate overwhelmingly passed bankruptcy reform legislation that, among other things, authorized these two judgeships, though under the Senate bill the judges were of temporary, rather than permanent, status. This legislation ultimately was not enacted into law, however, and with such inaction the problem facing Maryland's sitting bankruptcy judges has only grown. Maryland remains without the additional judgeships it so desperately needs to make our bankruptcy system work.
Our State's need for additional bankruptcy judges has long since passed the critical stage. Since November 1993, when Maryland last received an additional bankruptcy judge, the number of bankruptcy filings in the State has more than doubled. While the entire nation has witnessed a surge in bankruptcy filings over the past several years, the increase in Maryland has dwarfed the national average increase. Bankruptcy filings in Maryland in the second quarter of 1998 grew at eight times the national rate of increase for that period; for the 12-month period ending June 30, 1998, the rate of increase in Maryland was the tenth greatest of the 90 federal judicial districts in the Nation. The District of Maryland ranks first among federal judicial districts in filings per judge. As noted earlier, each House of Congress authorized two additional bankruptcy judges for Maryland during the 105th Congress. Simply put, however, the problem has outpaced this solution.
The need for the four additional judgeships sought in this legislation becomes even more evident when one considers it in the context of the case-weighting system adopted by the Judicial Conference in 1991 to assess requests for additional bankruptcy judges. Under this system, different types of bankruptcy cases are assigned different degrees of difficulty and overall weighted case-hour goals are established for the judges.
The Judicial Conference begins to consider requests for additional judges when a district's per-judge weighted caseload reaches 1500 hours. The average United States Bankruptcy Judge had a weighted case-hour load of 1429 hours per year for the 12-month period ending June 30, 1998. For that same period, Maryland's bankruptcy judges averaged a weighted case-hour load of 3020 hours--an astounding 211 percent of the national average. Not only do the Maryland figures dwarf the national average; they also dwarf the prior Maryland figures which led to legislation passed by each Houses of Congress authorizing additional judgeships. Indeed, Maryland's overall weighted case load for the 12-month period ending June 30, 1998, represented a 25% increase over its load for the prior 12-month period alone.
I ask my colleagues to consider these telling statistics:
If Maryland were to receive two additional judgeships tomorrow, its per-judge weighted caseload would still be 2013 hours--41 percent greater than the national average last year, and 34 percent greater than the 1500-hour benchmark used by the Judicial Conference to evaluate requests for additional judgeships.
If Maryland were to receive three additional judgeships tomorrow, its per-judge weighted caseload would still be 1725 hours--21 percent more than the national average, and 15 percent greater than the Judicial Conference benchmark.
Only if Maryland were to receive four additional judgeships, as requested in this bill, would the per-judge caseload in Maryland approximate the national average. And even then each Maryland judge would have a caseload of 1510 case-weighted hours--still above the 1429-hour national average, and still above the 1500-hour Judicial Conference benchmark.
The additional judgeships sought in this bill are essential not only for effective judicial administration, but also for Maryland's economy. Bankruptcy laws foster orderly, constructive relationships between debtors and creditors during times of economic difficulty. Their effective and expeditious implementation results in businesses being reorganized, jobs (provided by creditors and debtors) preserved, and debts managed fairly. Overworked bankruptcy courts have a destabilizing effect on this system, and the inevitable delays occasioned by the lack of judges harm creditors and debtors, imperiling Maryland's businesses and the people they employ.
It is expected that bankruptcy reform legislation will be one of the first items on the Senate's agenda now that it has resumed legislative business. Adding judgeships in Maryland's and other bankruptcy courts in need of relief is an essential component of any such reform, given that the legislation we are contemplating will not only not ease the burdens on these courts, but in fact will increase these burdens by imposing new responsibilities on our nation's bankruptcy judges. And even if comprehensive bankruptcy reform fails or is delayed, the current state of affairs facing Maryland's bankruptcy court requires immediate action in the form of adding judges to that court.
In closing let me once again commend the efforts of Maryland's four sitting bankruptcy judges--Chief Judge Paul Mannes and Judges Duncan Keir, James Schneider, and Steve Derby. Their dedication to the administration of justice is especially impressive given the extraordinary burdens placed on them--burdens which the Senate ought to ease at the earliest possible instance.