Lloyd Bentsen: “I rise as a co-sponsor and strong supporter of H.R. 2604, the Religious Liberty and Charitable Donation Protection Act.…”

“I rise as a co-sponsor and strong supporter of H.R. 2604, the Religious Liberty and Charitable Donation Protection Act. This legislation provides much-needed protection to churches and other charitable organizations by preventing creditors from attempting to seize tithes and other donations made by individuals who later file for bankruptcy. Business and individuals should have the right to vigorously pursue the repayment of bad debts. But they should not have the right to reach into church offering plates and the limited budgets of charities providing invaluable services. I know from the experience of a church in my district, the Cedar Bayou Baptist Church in Baytown, how harmful current law can be. Cedar Bayou was sued by creditors in 1995 and in September of 1997, the church was ordered to return $23,000 in tithes given by a member who later declared bankruptcy. The church has run up more than $7,000 in legal bills defending itself in court and expects the costs to rise even higher as it proceeds with an appeal of its case. Other churches across the country have incurred even higher costs, with one church in Minnesota spending $280,000 on legal fees in a case that reached the U.S. Supreme Court. Unfortunately, the courts have ruled that tithes and donations are not protected from bankruptcy proceedings and instead are considered fraudulent transfers under current bankruptcy law. So there is an urgent need for this legislation.”