Bankruptcy reform in limbo over abortion tiff

| 9/30/2002

Both the U.S. House and Senate have passed bankruptcy reform bills to force people with means to repay debts through Chapter 13 repayment plans instead of discharging debts through Chapter 7 - but the bill is on life support over a dispute involving abortion protesters.

Reform supporters say a record number of bankruptcy filings (1.5 million over 12 months), means too many people walk away from their debts when they can afford to repay. More than 70 percent of last quarter's bankruptcy filings were Chapter 7 cases, according to press reports.

However, final passage awaits resolution of a dispute about whether protesters who block abortion clinics can use bankruptcy to avoid paying court judgments or fines. Sen. Chuck Schumer (D-NY) added a provision to deny bankruptcy protection to pro-life advocates.

Some conservatives who support bankruptcy reform object to Schumer's provision, saying activists often face thousands of dollars in fines and legal fees for praying on a sidewalk, if it impedes a person's access to an abortion clinic.

Meanwhile, credit card companies are not happy - they reportedly gave Republicans $41.5 million and Democrats $21.5 million between 1995 and 2001 to defeat the bill, according to press reports.