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Proposed Bankruptcy Law May Hurt Custodial Parents

Friday, March 9, 2001

A proposed bankruptcy law moves custodial parents owed child support up to number one in line for payment. Yet, critics say the change is smoke and mirrors, with debt to credit card companies gaining the same status as child support obligations.

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A proposed bankruptcy law moves custodial parents owed child support up to number one in line for payment. Yet, critics say the change is smoke and mirrors, with debt to credit card companies gaining the same status as child support obligations.
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(WOMENSENEWS)--The Senate is debating a bankruptcy bill that critics say would pit custodial parents, most often women, who are trying to collect child support against credit card companies.

The bill, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2001, passed earlier this week in the House 306-108, with 18 abstentions. The female members of Congress were almost split, with 20 voting for the bill and 24 against it and only one not voting.

Senate debate is expected to continue next week.

Supporters say the bill would put custodial parents ahead in their quest to receive the money they're owed. But critics described the bill as smoke and mirrors. What you see is not what you get, according to over 30 women- and family-oriented organizations, including the Children's Defense Fund, the Feminist Majority Foundation, National Organization for Women, National Women's Law Center, National Youth Law Center and NOW Legal Defense and Education Fund. (Women's Enews is a project of NOW Legal Defense.)

Since 1903, child support debts have survived bankruptcy, that is, the debtor still must pay the bill regardless of the bankruptcy. The new bill accords this same status to credit card companies as well. So when an absentee parent emerges from bankruptcy, credit card companies will compete with child support for the debtor's new income.

The U.S. Census, in 1997, reported that only 67.4 percent of parents who were due child support received part or full payment of what was due.

Two Democratic House members said they voted against the bill because it places custodial parents in the same position as credit card companies.

The proposed bankruptcy law "does not sufficiently protect the financial priorities of so many struggling families, women and children," said Rep. Nita Lowey, D-N.Y.

"I support efforts to reform our bankruptcy laws to make debtors responsible for their liabilities," added Rep. Louise Slaughter, D-N.Y. "But we must not allow this ill-conceived bill to turn back the clock on the progress we have made to ensure that women and children in crisis receive the support they are owed."

However, supporters of the bill, such as Rep. Constance Morella, R-Md., claim that the proposed law would actually increase protections for single parents and children.

Key provisions of bankruptcy law assign priorities among the persons and entities owed money, that is, who gets paid first and most.

Currently child support is number seven on the list of priorities but it is among the debts that cannot be discharged, that is, forgiven, through filing for bankruptcy.

Bill Requires Payment of Full Child Debt to Exit Bankruptcy

Morella points out that the new law moved child support obligations to first place in priority. And Rep. Marge Roukema, R-N.J., a pioneer in child support enforcement, also voted for the bill and praised its child support provisions. In a statement she said the bill would make getting out of bankruptcy conditional on complete payment of child support debt. Roukema served on the U.S. Commission on Interstate Child Support throughout the 1980s and early 1990s.

Others disagree. Going from seventh to first is often without meaning, these critics claim, unless other creditors are a fish processing facility or employees owed benefits, vacation and leave pay--those debts that were ahead of child support obligations under the old law. Most bankrupts are not sole owners of businesses and thus not responsible for these types of debt, they add.

Moreover, under the current law, child support debt survives bankruptcy anyway, and therefore it is often in the best interests of the custodial parent and children for the bankrupt to settle other debts first, freeing income for ongoing support obligations.

And they argue, if the child support debt has to be paid along with all other debts, that will prolong the process and put child support obligations on the same footing as other debt.

"I think the proponents of this bill have misstated what it would and would not do," said Joan Entmacher, vice president of the National Women's Law Center and director of its department for family economic security. "All of the members of Congress have been lobbied very hard on this bill and the commercial credit industry has put a lot of money into putting this bill through."

"You can't make commercial interests happy and still protect families," said Entmacher. "It is a zero sum game."

The bill has enough votes in the Senate to pass and the President has said he would sign it. President Clinton vetoed similar bankruptcy legislation last year.

Elizabeth Randolph is a writer based in New York.


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A special Women's Enews feature during Women's History Month

(WOMENSENEWS)--In 1916 Margaret Sanger starts the first birth control clinic in the United States, in Brooklyn, N.Y. It is thought that Emma Goldman might have introduced Sanger to the birth control issue.

Margaret Higgins Sanger had worked as a visiting nurse on the Lower East Side of New York City. She said a patient, Sadie Sachs, who died after an unintended pregnancy, was Sanger's inspiration for activism.

Ten days after Sanger's clinic opened, she was arrested for violating laws against giving out birth control information. Her sister Ethel Byrne, working at the clinic as well, also was arrested and jailed.

The tide of unchecked hostility toward Sanger's work turned in 1929, when police raided her New York clinic, impounding medical records. The medical community rose up to rally for Sanger.

For a half-century, Sanger operated clinics, organized against Comstock censorship laws and educated people about women's need for reproductive choice.

In 1942, the American Birth Control League, which Sanger had founded in 1921, became the Planned Parenthood Federation of America. Her work continues. --Glenda Crank Holste