New Jersey Bankruptcy Laws In Depth And How They Correspond With Other Laws

An overwhelming majority of Americans believe it is too easy to declare bankruptcy and that individuals should not be allowed to erase their debt in bankruptcy if they are able to repay at least a portion of what they owe. The Bankruptcy Reform Act of 1999 would restore some degree of personal responsibility, fairness, and accountability to our nation's bankruptcy laws. The bill ends some of the abuses that have allowed individuals to file bankruptcy and walk away from their debts, even though many are able to repay a portion of what they owe.

The number of consumer bankruptcy filings hit a record high of 1,442,549 million in 1998--a 400 percent increase since 1980 and an 84.2 percent increase since 1990--erasing some $40 billion in consumer debt. Total filings in 1998 increased by 2.7 percent from 1997, when bankruptcies totaled 1,404,145. Those losses were borne by businesses and passed on to the consumer, costing every household that pays its bills $400 in hidden taxes.

In the first six months of 1997, Chapter 13 bankruptcies in Georgia rose 11 percent to a total of 10,576. Chapter 7 liquidations' filings rose even higher up 26 percent to a total of 6,789 in the same period. Georgia had the fifth highest number of bankruptcies in the entire nation. These numbers clearly illustrate why I cosponsored and fully supported H.R. 833.

The bankruptcy debate is really about nothing more than personal responsibility. Will we continue to allow a handful of individuals to abuse the process, by running high debts and then hiding their resources behind lenient bankruptcy laws, or will we require individuals to make good on their promises when they have the ability to do so? The Bankruptcy Reform Act changes these dynamics by initiating comprehensive reforms pertaining to consumer and business bankruptcy law and practice. The Act includes provisions regarding the treatment of tax claims and enhanced data collection regarding annual bankruptcy filings.

When we allow the bankruptcy process to be abused, everyone loses. Small businesses are forced to close, employers hire fewer employees, new retail establishments do not open, and we are all forced to pay higher prices at the cash register. The Bankruptcy Reform Act of 1999 will help remedy this problem. In the 105th Congress a Conference Report on Bankruptcy Reform passed by a vote of 300 to 125. Unfortunately, by a combination of factors, Congress was not able to send this comprehensive bankruptcy reform to the President before the election end of the session.

Due to a personal medical reason, I was absent on final passage in the Judiciary Committee on the vote on H.R. 833. However, my strong cosponsorship of this legislation is a clear indication of my belief it is time to reform our bankruptcy laws. I will continue to support this important bill as it moves onto the floor to be considered by the entire House.