Senate Concurrent Resolution 514

A CONCURRENT RESOLUTION URGING THE UNITED STATES CONGRESS TO AMEND THE FEDERAL BANKRUPTCY LAW TO WAIVE THE NEW STRICT REQUIREMENTS FOR RESIDENTS OF THE MISSISSIPPI GULF COAST, LOUISIANA AND ALABAMA WHO ARE FILING FOR BANKRUPTCY DUE TO THE EFFECTS OF HURRICANE KATRINA AND HURRICANE RITA.

WHEREAS, on October 17, 2005, new strict requirements for bankruptcy filers under the federal Bankruptcy Abuse Prevention and Consumer Protection Act took effect; and

WHEREAS, even though bankruptcy should not be a convenience or financial planning tool, this new law was specifically designed to make it more difficult to file for bankruptcy, which is the only financial safety net available for most middle-class families; and

WHEREAS, in the wake of Hurricane Katrina and Hurricane Rita, Congress should at least rectify the harshness of the new bankruptcy law for the residents of Mississippi, Louisiana and Alabama. For many families and small businesses, the storm's devastation will not be fully felt for weeks or months, until they face the crippling financial consequences of lost property, lost wages and lost jobs. They may have lost their house and car, but the obligation to pay for them will not recede like the water; and

WHEREAS, common sense tells us that when families are hit hard by hurricanes, more of them will end up filing for bankruptcy. A new study in the Nevada Law Journal agrees the rate on growth in bankruptcy filings following the biggest hurricanes of the past 25 years is about 50% higher in states that have suffered a direct hit and about 20% higher in nearby states. In an ominous note for the victims of the latest disasters, the study also shows that not all storms are alike. When storms hit in areas that resulted in lower total FEMA relief payments (rather than in more expensive areas with more beachfront condos and second homes), the increase in bankruptcy rates goes even higher. The highest increase in bankruptcy filings in the past 25 years occurred when Hurricane Elena hit Mississippi in 1985; and

WHEREAS, once the new law goes into effect, everyone, regardless of income and regardless of the reason for filing, must file extensive new paperwork and meet other new procedural requirements. Just when the Gulf Coast region needs its entrepreneurs most, fewer of them will get the chance to recover from the financial devastation of Hurricane Katrina and Hurricane Rita to start their business again. The bankruptcy laws have been amended to offer less help to Americans when disaster strikes. When people arrive at the bankruptcy courts, they are exhausted, both physically and financially. For Congress to turn its back on these families as they struggle to put their lives back together is shameful; and

WHEREAS, Mississippi residents who have been hit by the Gulf Coast Hurricanes have lost their homes, business and even loved ones, and now may face financial ruin without the protection of bankruptcy:

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF MISSISSIPPI, THE HOUSE OF REPRESENTATIVES CONCURRING THEREIN, That we do hereby urge the United States Congress to enact legislation to mitigate the harshest effects of the new federal Bankruptcy Abuse Prevention and Consumer Protection Act by waiving these new requirements for residents of the Mississippi Gulf Coast, Louisiana and Alabama who are filing for bankruptcy due to the financial effects of Hurricane Katrina and Hurricane Rita.

BE IT FURTHER RESOLVED, That this resolution be certified by the Secretary of State and forwarded to members of Mississippi's congressional delegation, the United States Attorney General, the President of the United States, and be made available to the Capitol Press Corps.