Orrin Hatch: “I am here in opposition to the Wellstone amendment to permit a debtor to repeatedly use chapter 13. The effect of his…”

“I am here in opposition to the Wellstone amendment to permit a debtor to repeatedly use chapter 13. The effect of his amendment is that it strikes the provisions of the reform act which require a debtor to wait 5 years between chapter 13 bankruptcies. Present law allows the debtor to file repeated chapter 13s, one right after another. The amendment is unnecessary. Senator Leahy and myself have already worked out an adjustment to be included in the managers' amendment, which permits a debtor to refile a chapter 13 within 2 years after a previous bankruptcy and provides a hardship exception if the debtor absolutely has to have chapter 13 relief more frequently. The amendment encourages debtors to repeatedly use chapter 13 regardless of whether they need it. It undercuts personal responsibility. Repeated use of chapter 13 should only be rarely necessary. It should never be allowed, unless a judge determines the debtor is really experiencing hardship. The amendment encourages bankruptcy mills to abuse the system by repeatedly putting their clients into chapter 13. This is a documented abuse that has been noted by many observers. It is difficult for me to see what merit the distinguished Senator from Minnesota finds in this particular amendment. I oppose this amendment that would undercut personal responsibility and encourage abuse of the bankruptcy system. I hope our colleagues will vote this amendment down.”