1998 Regular Session

To: Rules

By: Senator(s) Smith

Senate Concurrent Resolution 661


WHEREAS, the basic idea of bankruptcy is to provide a safety net of personal bankruptcy or "fresh start from creditors" to the average citizen -- the farmer, the divorced or widowed working mother whose husband left her with credit card bills, or the downsized worker struggling to pay for yesterday's higher standard of living; and

WHEREAS, like many progressive policies that have been unexamined for too long, bankruptcy laws now serve a very different and less deserving clientele; and

WHEREAS, more often than not, those filing for a "fresh start" under Chapter 7 of federal bankruptcy law are upper or upper-middle income Americans with stable or rising incomes, who calmly calculate that filing for bankruptcy offers a better deal

than paying off creditors; and

WHEREAS, the "little guy" pays more at the cash register, an estimated $400 per family each year, for retail goods to offset bankruptcy related losses, and also, ironically gets reduced access to credit from bankruptcy-wary lenders; and

WHEREAS, in 1997, United States Representatives Bill McCollum (R-FL) and Rick Boucher (D-VA) introduced legislation, H.R. 2500 (since incorporated into a comprehensive bankruptcy bill, H.R. 3150), to reform personal bankruptcy law; and

WHEREAS, H.R. 2500 establishes a "needs-based" system whereby upper- and middle-class petitioners with sizeable net income above their debts and living expenses must file under Chapter 13 of the bankruptcy laws, which requires setting a payment schedule for liquidating a portion of debts, as opposed to Chapter 7's "fresh start"; and

WHEREAS, H.R. 2500 changes nothing at all for families with income less than 75% of the national median; and

WHEREAS, like affluence tests for federal benefits, a needs-based bankruptcy system is a way to ensure that the protection of the federal safety net extends only so far as it is actually needed:

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF MISSISSIPPI, THE HOUSE OF REPRESENTATIVES CONCURRING THEREIN, That we do hereby urge Congress to pass H.R. 2500 (1997), legislation reforming personal bankruptcy laws.

BE IT FURTHER RESOLVED, That copies of this resolution be furnished to the Mississippi Congressional delegation and be made available to the Capitol Press Corps.