Thomas Daschle: “the bankruptcy bill before us today has come this far because it is needed to address the record number of bankruptcy…”

“the bankruptcy bill before us today has come this far because it is needed to address the record number of bankruptcy filings this country has seen in recent years. The number of personal bankruptcies hit 1.4 million in 1998--a new record. While that number declined slightly last year--to 1.3 million bankruptcy filings--it is still too high. It is still nearly twice the number we saw in 1990, during the depths of a recession. What accounts for this increase? It's clear that most people who file for bankruptcy do so only after suffering a serious reversal, such as serious illness, divorce or job loss. And most do so only as a last resort. But economic conditions clearly are not the only factor. If they were, we would have seen a drop in bankruptcy filings during the 1990s, given the booming economy. Instead, we saw record increases during the 90s. Clearly, some people are gaming and abusing the bankruptcy system. For them, the old stigma associated with bankruptcy has faded. The purpose of this bill is to stop those abuses. Many have asked--fairly--whether the solution it imposes is too tough on ordinary debtors who deserve the protection of bankruptcy court. Critics of this bill say that it makes it more difficult for people who have incurred overwhelming debts through no fault of their own to get back on their feet. In many ways, I agree with them. This bill could have been more balanced.…”