By Allison Stevens
Friday, March 4, 2005
Women's activists say that a new bankruptcy law--now at a critical juncture in the Senate--robs many women of a crucial protection from job loss and medical calamity and makes it harder to collect child-support payments.
Washington, D.C. (WOMENSENEWS)--The Senate is poised to vote next week on a controversial amendment to a proposed bankruptcy law that is related to abortion rights.
If the amendment is voted down, the underlying bankruptcy bill--intended to make it harder for debtors, the majority of whom are women, to file for bankruptcy--will have its best chance in nearly a decade of becoming law.
The proposed bankruptcy law revisions got a quick stamp of approval by the Senate Judiciary Committee in February with 12 votes, three cast by Democrats, and faces little resistance in the House. The revisions also have President Bush's support.
That fills many women's rights activists with dread.
"Women who file for bankruptcy, like women generally, have less income and more family responsibilities," said Joan Entmacher, a lawyer at the National Women's Law Center, a non-profit organization in Washington, D.C. "So when something goes wrong . . . they're more likely to fall over the edge."
In 2003, more than 1 million women and children sought shelter under the bankruptcy code, according to Entmacher; 9 out of 10 women who filed did so because of the loss of a job, a medical emergency or family breakup, or a combination of one or more of those factors, not because they want to avoid paying the price for shopping sprees, Entmacher said. Complete figures for 2004 are not yet available.
Critics of the revisions also charge that the if the proposals become law it would become harder for women to collect alimony and child support.
The revisions affect women as debtors and also as ex-spouses of people who are debtors, added Travis Plunkett, legislative director at the Consumer Federation of America, an advocacy group in Washington, D.C. That is because, under the proposed revisions, parents with unpaid child support would need to compete with the debtors' credit card companies for the debtor's remaining assets. Moreover, the parents will not have the professional legal staffs that the credit card companies have access to.
One amendment, however, could serve as a so-called poison pill and derail the entire bill, as it has done in the past. The amendment, sponsored by New York Democrat Sen. Charles Schumer, would prohibit abortion clinic protesters and other demonstrators from filing for bankruptcy to evade court-ordered fines for illegal activities. The Schumer amendment has been adopted in previous years, prompting conservative lawmakers to allow similar bankruptcy legislation to die.
Schumer has told reporters in recent weeks that the outcome of the vote--expected next week--is uncertain but said he believes it will be close.
If the Schumer amendment fails, advocates such as Entmacher will be left hoping that their allies in the Senate will have made enough changes to the underlying bill to make it significantly different from the House version. This could lead to a stalemate between House and Senate negotiators in conference committee.
As a final recourse, they will look for a senator to step forward and lead a filibuster to block the bill.
"I always think there's a bankruptcy goddess who watches out for us," Entmacher said. "We're not giving up hope yet."
Critics of the Schumer amendment consider it an attack by reproductive rights leaders against "peaceful protestors." The legislation, they say, unfairly singles out a narrow class of debtors and clinic violence, they add, is on the wane.
Proponents disagree. They claim anti-choice leaders have implemented a strategy to encourage activists to use a loophole in bankruptcy law to avoid paying fines assessed for threats and perpetration of clinic violence. Legislation is needed to close that loophole and curb what NARAL Pro-Choice America, a leading reproductive rights advocacy group in Washington, D.C., calls an "anti-choice campaign of violence" involving murders, attempted murders, bombings, arson, vandalism, blockades and anthrax and bomb threats against abortion providers and their patients.
Banks and credit card companies would also benefit if the Schumer amendment falls, if only because it would mean the underlying bankruptcy bill would have a much greater chance of passage this year.
The bill would make it harder for consumers to walk away from their debts by creating a so-called means test--or measure of financial wherewithal--to determine whether debtors are able to repay their bills. Under the legislation, debtors who earn more than the median income in their state--and who have the ability to repay at least $6,000 over five years--would be required to repay at least a portion of their debt under a court-ordered payment plan. Those who earn less than the median income in their state could still seek shelter under other parts of the bankruptcy code.
Such an approach would alleviate the burden on banks and credit card companies left with bills from consumers who, in increasing numbers, are using the bankruptcy system to restructure their debt. In the first nine months of 2004, roughly 1.2 million individual consumers filed for bankruptcy, according to Kenneth Beine, president and CEO of the Wisconsin-based Shoreline Credit Union. That number, he said during Feb. 10 testimony before the Senate Judiciary Committee, is more than double the national total recorded in 1994 and six times higher than the total in 1984.
At the same time, banks and credit card companies maintain that the bill's means test would preserve the "safety net" for those who truly need it. "It simply requires people who can afford to pay a significant part of their debt to do so, rather than wiping out their debt entirely," said J. Craig Shearman, a spokesperson for the National Retail Federation, a retail trade association in Washington, D.C. "It's aimed at people who are choosing bankruptcy as an easy option, not at people who are truly destitute."
But critics insist that the bill would not protect low- and moderate-income families. Debtors with incomes only marginally above the state median would not be able to file to use the protection of the law, they say, and poor individuals may not be able to bear the legal costs of a more complex filing system. In addition, the bill does not take circumstances into account and instead treats all debtors alike, whether they maxed out their credit cards on frivolous shopping sprees or overspent to cover crushing medical expenses.
Testifying against the bill before the Senate Judiciary Committee in February, Elizabeth Warren, a law professor at Harvard University, summed up her camp's position, saying: "If Congress is determined to sort the good debtors from the bad, then it is both morally and economically imperative that they distinguish those who have worked hard and played by the rules from those who have shirked their responsibilities."
Allison Stevens is Washington Bureau Chief at Women's eNews.