Posted on 03/09/2005 1:45:09 PM PST by DannyTN
FRIST COMMENTS ON BANKRUPTCY DEBATE Floor Statement -- Remarks As Prepared For Delivery
Senator Bill Frist, M.D. March 8th, 2005 - Mr. President, we have made tremendous progress on the bankruptcy bill. Republicans and Democrats have stood together to support a bankruptcy reform package that the House will pass and the President will sign into law. The Senate has resisted attempts to renegotiate hard-fought compromises and legislate on unrelated issues. I commend my colleagues for staying focused.
There have been many attempts to sidetrack the Senate on this bill. Let me begin by reiterating why we need bankruptcy reform and what this bill really does.
The bill before us establishes a means test based on a simple, fair principle: those who have the means should repay their debts. Personal bankruptcies are skyrocketing and wealthy debtors are walking away from debts they have the ability to repay. Opportunistic debtors who have the means to repay use the law to evade personal responsibility.
This abuse doesn’t just hurt the creditor they owe, it hurts all of us who pay higher fees and prices as a result.
Every bill you and I pay includes a hidden “bankruptcy tax” of $400 a year per household. That tax is figured into in every phone bill, electrical bill, mortgage payment, furniture purchase, or car loan we pay.
Interest rates are higher, down payment requirements are larger, grace periods are shorter, and late payment penalties are astronomical – all because some people are shirking their debt obligations.
This legislation is targeted to ensure that wealthy debtors who can pay their debts do so.
It specifically exempts anyone who earns less than the median income in their state. And it also allows every consumer to show “special circumstances” if they cannot handle a repayment plan.
We know that one reason people file for bankruptcy is because of an unexpected medical emergency. Consequently, this legislation allows every filer to deduct 100% of their medical costs.
We also know that education is a big outlay for many families. Under bankruptcy reform, parents can deduct private school tuition to protect their children’s educational opportunities.
In addition:
The bankruptcy bill strengthens protections for child support and alimony payments.
It protects patient privacy and care during bankruptcy proceedings that involve health care facilities.
It protects consumers from deceptive credit practices that can lead to financial distress.
And it protects the system that allows America to be one of the most generous countries when it comes to bankruptcy.
There remain, however, some misconceptions about this bill that should be dispelled. The first regards our protections for active duty military personnel and veterans.
Some opponents of the bill charge that we do not adequately address the needs of our men and women in combat who may suffer financially.
Mr. President, it should go without saying that the United States Senate and the American people deeply honor our men and women in uniform. Everyday, these young soldiers sacrifice to protect us and defend our freedom. We are indebted to them for the dangers they face on the field and the families they leave in order to fight.
That is why last Tuesday, we passed the Sessions amendment to help clarify protections for our military and others under a safe harbor in the bill. This provision, which passed with 63 votes, makes explicitly clear that active duty military and low income veterans are protected by the safe harbor. In addition, it also protects debtors with serious medical conditions.
On this issue, the other side has created a red herring designed to score political points and shift the debate away from bankruptcy abuse.
Another red herring is the charge that the bankruptcy bill sacrifices consumers to benefit credit card companies. The truth is that the bill before us includes several carefully negotiated amendments that expressly protect credit card holders.
Among its beefed up consumer protections are:
Increased disclosure requirements for credit card statements and mandates that credit card companies assist borrowers in determining how long it will take to pay off their credit card balances;
Additional disclosures to borrowers buying and refinancing their homes;
And additional disclosures regarding credit card “introductory rates” and new disclosures related to credit card late fees.
These protections are the result of lengthy and careful negotiation. Additional measures should be properly addressed in the Banking Committee. As Senator Sessions has pointed out, we are debating a bankruptcy bill designed to create a fair and common sense process in the federal courts.
Moreover, the bill before us has passed this body three times with overwhelming bipartisan support. In the 105th Congress, it passed by a vote of 97 to 1. Again in the 106th 83 to 14. And again in the 107th by a vote of 82 to 16.
It is time to take action on a much needed reform that is supported by both sides of the aisle.
I am confident that by working together we can get this done in this Congress, this week, and see bankruptcy reform signed into law.
It is long past time to stop abuses of the bankruptcy code. The legislation before us is thoughtful and well considered. It offers the opportunity to give the system, and the people it is designed to help, a fresh start. In short, it promises to deliver meaningful solutions that keep America moving forward.
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Although I do wonder what is meant by medical and educational costs being deductable. Is that with regard to bankruptcy law only, or is that a tax law change buried into this bill.
The biggest con was when they could shorten the billing cycle to 25 days. That was a trap to pull in month to month payers.
I got pissed, took the early withdaw hicky and closed out my accounts.
The economist know that credit makes this economy work. I chose not to play anymore.
Credit Card companies extended bad debt to deadbeats, the uneducated and underinformed, so those companies HAVE to eat the cost of their folly. They can't change the rules on folks after those people have run up the debt. It's unethical, unfair and greedy. Don't change the rules after the game has begun.
" As long as they can change the terms after you already have the debt, additional disclosures aren't worth squat."
AMEN and that's where the real problem lies. They let you establish the debt and then change the payment terms/interest rates.
should be illegal to make these changes apply to charges that occured previous.
"Personal bankruptcies are skyrocketing "
Lets try to work to stop that from happening first.. IE do something about offshoring.
It is their "payback" for 8 years of writing very large checks to Republican (and a few) Democrat politicians.
"The only way to get back at credit card companies is to refuse to use their product - we pay cash for everything and have for years - it really is not that hard and we never have to worry about loan shark credit card companies trying to come after our first born child."
Actually, there's really no need to completely stop using credit cards. You just have to pay them off each month. I keep a couple with high limits, for emergencies, and I use them when I must, like in hotels and for rental cars, which demand credit cards since your bill is uncertain until you return the car or check out of the hotel.
I just pay them off the day the bill arrives. The one I use most is from my bank, and I can pay the bill by transferring money online directly to the credit card account. That's the card I normally use. The other one, I use occasionally, just to keep the account active. That one I pay the same day the bill arrives. No balance, no interest. They hate me, but they're not willing to pull the card, since I MIGHT use it sometime and get back into their cycle.
Credit cards are the worst possible way to finance anything. You should never use them to buy anything you can't pay for on presentment of the bill. For large ticket items, like cars, finance through another method.
It's so simple.
This is VERY serious stuff. And for our rich and powerful pols to side with the rich and powerful companies (and contributors) has all the ingredients to form a populist revolt. The GOP is idiotic to think that a few smart Dems won’t capitalize on this.
I’m a dedicated conservative, law-and-order guy. If you borrow, you pay it back. But for financial institutions to change the rules midstream (especially on low-income families) is not only wrong, it’s evil.
In defense of these credit card companies, refusing to extend credit to "deadbeats, the uneducated and underinformed" would probably land them on the wrong side of some kind of stupid Federal regulation aimed an eliminating "racist lending practices."
Exactly! I agree.
But I wonder what happens to people that are victims of identity theft? What if their credit is ruined because of someone else running up their bills and they can't file bankruptcy.
Anyone here think Frist is good presidential possibility?
bookmark
Most credit card companies don't "change the terms" after you are already in debt -- the terms of their lending agreement specifically allow them to do these things, which is why you should always read the fine print on every piece of paper you get from your banks and credit card companies.
If you are carrying a balance on a low-interest credit card, you should ALWAYS be prepared to deal with a potential scenario where your credit card company raises your interest rate to about a bazillion percent on short notice. If you can't address this situation, then you shouldn't have an open line of credit in the first place.
No you are wrong. If you make a late payment the credit card company will sell your account to another company that will change the terms on you.
I never once signed an agreement that allowed interest rates to go above 20% even if I was in default. But when I did get in trouble they all shot up to 27%, even though I had only been late a couple of times and only on one card.
I just use our debit card for car rentals and hotels - they just place a hold on a certain portion of your account until you return the car or check out of the hotel - it comes out of our checking account just like giving the person cash - no interest, no late fees, no overlimit fees, if the money isn't in the savings or checking you don't get to rent the car or sleep away from home.
It is not an easy thing to do but it does get easier after awhile. Our kids have learned a really good lesson on saving for things they want and then paying cash for it.
I have no problem with them tightening the rules on bankruptcy. I just wish they'd smack the credit reporting agencies around a bit. They have yet to change information regarding my current address and employer even though I have notified them about the error 4 times in the past year.
"It's so simple."
yeah, but those predatory lenders put a gun to ma head
and made me sign up for the card. (sarcasm)
this reminds me of the great ATM fee debate.
(there are no free lunches.)
When I was a college student, every classroom was plastered with credit card offers. Now I hear that a lot of high schools are filled with credit card ads. I’m sorry, but 95% of young adults have no financial savvy and little common sense. They see their friend’s new iPod, want to impress their date with a nice dinner, see that rich jerk’s nice clothes and they charge away. “But so what,” the college freshman thinks, “I’ll be rich when I graduate! I’ll pay off all these student loans too.” Yeah right. He doesn’t even know how to balance a checkbook.
Is it this guy’s fault for being in debt? Sure, we’re all responsible for our actions. It’s also his fault for not reading the fine print, not understanding that he won’t be “rich” upon graduation, and not spending his Friday nights poring over Byzantine financial disclaimers in five-point type. But he’s a dumb kid, the card companies know it and prey on him accordingly. They want him in debt slavery to them for the rest of his life.
As I mentioned before, these companies are changing the rules in the middle of the game. Just like the Dems try to do every election. That is wrong and I’m disgusted that the party to which I gave money is doing the dirty work.
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