Orrin Hatch: “one of the most difficult aspects of this bankruptcy bill we have had is trying to resolve the problems with regard to…”

“one of the most difficult aspects of this bankruptcy bill we have had is trying to resolve the problems with regard to home ownership and homestead exemption. It has been a very difficult problem and we have worked on both sides of Capitol Hill to try to come up with a solution that will work. Frankly, the solution we have come up with is in this bill, basically recognizing the States have the right to set the homestead cap rather than the Federal Government. My distinguished friend, Senator Kohl, is trying to change that with this amendment. This amendment jeopardizes bankruptcy reform by stripping out the bipartisan compromise homestead provision that we have worked out over a long period of time, over many years. This bipartisan compromise homestead exemption is in the bill, and the distinguished Senator from Wisconsin would require home equity, wherever acquired, that exceeds $125,000, will be subject to collection under the bankruptcy code. The bipartisan compromise homestead provision now in the bill substantially improves current law by requiring home equity acquired within 2 years before bankruptcy, not to exceed $100,000, to be subject to crediting in a bankruptcy estate. What the code does is prohibits individuals from shielding more than $100,000 in new equity in their home--paying down the mortgage, building an addition--if that new equity was obtained within 2 years of filing.”