Mrs. CLINTON. Mr. President, I rise today in support of final passage of S. 420, the Bankruptcy Reform Act. Many of my colleagues may remember that I was a strong critic of the bill that passed out of the 106th Congress because I did not believe it provided a balanced approach to bankruptcy reform.
While we have yet to achieve the kind of bankruptcy reform I believe is possible, I have worked with a number of people over the past three years to make improvements that bring us closer to our goals, particularly when it comes to child support. Women can now be assured that they can continue to collect child support payments after the child’s father has declared bankruptcy. The legislation makes child support the first priority during bankruptcy proceedings.
This year, we have made more progress. The Senate agreed to include a revised version of Senator SCHUMER’s amendment to ensure that any debts resulting from any act of violence, intimidation, or threat would be non-dischargeable. Earlier today, this body agreed to include a cap on the homestead exemption to ensure that wealthy debtors could not shield their wealth by purchasing a mansion in a state with no cap on homestead exemption.
And finally, today I worked hard to make sure that once a person has been declared bankrupt, single mothers can still collect the child support they depend upon. Senator HATCH and I passed an amendment to ensure that child’s custodian—usually the mother—will be informed by the bankruptcy trustee of her right to have the State child support agency collect the nondischargeable child support from the ex-spouse.
In addition, I was concerned about competing non-dischargeable debt so I worked hard with Senator BOXER to ensure that more credit card debt can be erased so that women who use their credit cards for food, clothing and medical expenses in the 90 days before bankruptcy do not have to litigate each and every one of these expenses for the first $750.
Let me be very clear—I will not vote for final passage of this bill if it comes back from conference if these kind of reforms are missing. I am voting for this legislation because it is a work in progress, and it is making progress towards reform.
Bankruptcy reform is important. I grew up with a father who worked hard to avoid having debts. In recent weeks, I have heard form many small credit unions throughout New York, hard working small lenders whose entire membership suffers when the credit union is faced with covering bankruptcy losses. One credit union from Hoosick Falls has assets of only $2.5 million, but when one of their members filed a Chapter 7 bankruptcy, this small credit union was left with a bill of thousands, which penalized the entire 1,000 membership with increased fees.
Reform is needed. The right kind of reform is necessary. We’re on our way toward that goal, and I hope we can achieve final passage of a good bankruptcy reform bill this year.