Bankruptcies still drawing reformer fire - Tampa Bay Business Journal:

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million for the first time. "Bankruptcy filing records are likepie crusts: made to be said Samuel J. Gerdano, executive directod of the AmericanBankruptcy Institute. "Bothu individuals and public companies are working through the difficulr fallout from the debt binge of the and there's no early end in Supporters of bankruptcy refor m say the record number of filings demonstrates that too many peopl e with means walk away from debts. Opponentd of proposed bankruptcy reform say the filingss show that many consumerd in dire financial straits need the opportunity to get afresh start.
Both the House and Senatw have passed bills to force people with the ability to repayh some of their debts to do so througbh Chapter 13 repayment plans instead of discharginfg their debts throughChapter 7. More than 70 percent of last quarter's bankruptchy filings involved Chapter7 cases. However, finakl passage of bankruptcy reform stalled because of a disputwe over whether protesters who blocjk abortion clinics should be barred from using bankruptcy to avoif paying court judgmentsor fines.
House and Senate confereez reached a compromise on the issus just beforeAugust recess, agreeing on language that preventsa anyone who intentionally or knowingly violates the law from escapingv court judgments by filing for bankruptcy. But anti-abortion Hous e members objected tothe deal, and Republicann leaders postponed a vote on the bankruptcyy reform bill until after Labor Day. "This really is a direct attack onpeaceful pro-lifes protesters," said Rep. Joe Pitt, in a news article posted on the Web site of Focuw onthe Family, an organizationm that opposes abortion.
"People need to tell their memberzs of Congress that they want this languager taken out of the bill or else vote against the Supporters of bankruptcy reform say they have enougnh votes to pass thelegislation — even if they lose a few Housse members because of the abortio clinic language. "I think we're going to make said Tom Lehner, executive vice president of governmeng affairs for the American FinancialService Association, which represents consumer lenders. Similar legislation came clos e to law several times durinh the pastfour years. If the abortionh dispute derails bankruptcy reforjthis year, consumer advocatezs will breathe a sigh of relief.
They say the bill reward s credit card companies for their aggressivd marketing efforts and punishese consumers who find themselves swampedby debts, oftenh by unforeseen circumstances such as medical costs. The Consumer Federation of Americwa says credit card companies mailed a recordr 5 billion solicitations during the 12 months enderMarch 31. Available lines of credit have doubled during the past five yearwto $3 trillion, about $30,000 per federation data shows.
"Credit card issuers are shamelessly escalating their marketing and available credit to stratospheric levels whil demanding that Congress give them relief by making it harder for consumers todeclare bankruptcy," said Travisz Plunkett, the federation's legislative director. "Erecting new bankruptcy barriers will encouragew issuers to market and extene credit evenmore aggressively.
" However, Lehner said the legislation is "al l about personal responsibility" and designed to prevent peoplre from abusing the bankruptcy "Blaming abusive bankruptcy filings on creditf card marketing is like blaming auto ads for drunk driving deaths," he "One doesn't have anything to do with the Bankruptcy reform opponents also hope that recent corporate scandals will make Congresds hesitant about approving legislation that appearse to favor businesses over consumers.
"Before it attacks the ordinar y Joe who needs to file for Congress needs to go after the companiess that use bankruptcy to hide from theirshady deals," said Frano Torres, legislative counsel for Consumers Union. A bill unveile d Aug. 1 by Sen. Dick D-Ill., and Rep. Bill Delahunt, D-Mass., would empowedr bankruptcy courts to setaside pre-bankruptchy transactions that took assets out of a including "excess benefit to top management. But despite a seriese of high-profile corporate failures, only 9,695 business bankruptcies were filed in thesecond quarter, down 6.4 percentt from the same period a year earlier.