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Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

Location: Washington, DC



Mr. BIDEN. Mr. President, I appreciate the sentiment behind Senator Durbin's amendment, but the fact of the matter is that it is not needed. In the first instance, it is simply not the case that the means test in this bill will prevent our men and women in uniform from receiving the full protection of our bankruptcy laws.

The means test will not apply to any one in military service under the median income in their State. The median income in Delaware for a family of four is $72,680. If a staff sergeant at Dover Air Force Base in Delaware had to file for bankruptcy, he would automatically be exempt, at his pay scale of $34,319. So there is no way, under the means test in this bill today, that he would be denied the full protection of chapter 7. That is precisely why I insisted on that safe harbor in the means test two Congresses ago.

So the very assumption behind the amendment, that we need to exempt service men and women from the means test, is wrong. And if a pilot at Dover, who might well fall above the median income, were to file, he would only be subject to movement to chapter 13 if, and only if, he had enough income after deducting all of his normal expenses, to continue to pay some of his bills. And under chapter 13, he could keep his house and other assets, something filers under chapter 7 cannot do.

As Senator Hatch pointed out earlier, and Senator Sessions, too, special protections exist in current law--the Soldiers and Sailors Relief Act--that prevent foreclosure on a house, that cap interest payments. The extra protections sought by the Durbin amendment are already in place.

On the point of the payday loans, I agree that is an abuse that should be halted. Truly unscrupulous lenders that take advantage of anyone, in uniform or not, should be put out of business. But that is in fact a matter for banking regulations, not bankruptcy law. This amendment is closing the barn door after the horse is already gone.

Under the bankruptcy reform bill before us, the test to determine a filer's ability to pay specifically allows for the ``special circumstances'' that could reduce their ability to pay. The Sessions amendment, that we just passed, makes it crystal clear that those special circumstances include service in the armed forces--if that service puts you into a situation where you are unable to pay your legal debts. That can happen to someone called up in the reserves, and it is precisely why that category of special circumstances was put into the bill in the first place.

I could not support this bill if I did not belief that it is already fundamentally fair. This is a bill that received 82 votes the last time the Senate voted on it. I would never call those Senators callous or indifferent to the difficult circumstances our servicemen and women face. They are not. The Durbin amendment assumes all 82 of us got it wrong last time. I do not agree.

With the additional clarification of the Sessions amendment, I am convinced that the concerns raised by Senator Durbin are fully addressed.

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