Reform Jewish Movement Urges Senators to Oppose Misguided Bankruptcy
Saperstein: "This legislation preys on the most vulnerable of our society, when uncontrollable circumstances -- layoffs, divorce, and medical crisis -- plunge them into financial crisis. Rather than enabling poor Americans to reconstruct their lives, S.886 would force the nation's most vulnerable into payment plans that are beyond their ability to complete."
WASHINGTON November 1, 2000- The Religious Action Center, on behalf of the Reform Jewish Movement, wrote a letter to members of the U.S. Senate, asking them to oppose draconian bankruptcy "reform" legislation that would harm, rather than help, low-income Americans. The full text of the letter follows:
During these final days of the 106th Congress, please do not turn your back on the needy and vulnerable across this country. I write to you on behalf of the Union of American Hebrew Congregations, whose 902 congregations encompass 1.5 million Reform Jews across North America, and the Central Conference of American Rabbis, representing 1800 rabbis throughout the United States, to strongly urge you to vote against the harsh new bankruptcy "reform" conference report, S. 886.
There exists in our nation a tragic irony: as our nation prospers, as economic growth has soared to new heights unseen by past generations, the United States Senate is considering approving bankruptcy legislation that would turn America's back on our least fortunate citizens. This legislation preys on the most vulnerable of our society, when uncontrollable circumstances -- layoffs, divorce, and medical crisis -- plunge them into financial crisis. Rather than enabling poor Americans to reconstruct their lives, S.886 would force the nation's most vulnerable into payment plans that are beyond their ability to complete. There are several crucial flaws in the legislation as it is currently framed:
- The process used to force a secretly-negotiated bankruptcy conference report through the final days of the congressional session strayed from the way our legislative process is intended to work. Legislative leaders circumvented bipartisan negotiations by substituting bankruptcy provisions for a State Department authorizing bill that passed Congress over a year ago. This new bill, S.886, is far harsher than the bankruptcy legislation passed by the Senate earlier this year.
- This bill will particularly hurt working families, the elderly, and single mothers and their families, thus deepening child poverty. Amendments were rejected that would have insured that parents and children owed support would prevail over the sophisticated collection departments of creditors.
- Individuals and groups convicted of violence, vandalism, and harassment against reproductive health clinics tragically make use of the current bankruptcy system to avoid paying the judgments and penalties resulting from their illegal acts. An amendment proposed by Senator Charles Schumer (D-NY) would have curbed this abuse by making debts related to clinic violence non-dischargeable in bankruptcy. Though this amendment passed the Senate by a vote of 80-17, it was dropped during the secret negotiations that produced this new bill.
- By subjecting bankruptcy cases to a complex and arbitrary means test, which assumes that all individuals face the same housing, food, and transportation costs, S. 886 would deny many applicants access to Chapter 7 bankruptcy, which excuses most debts. Instead, the legislation would divert these individuals into a Chapter 13 payment plan. Many families would find themselves bereft of bankruptcy assistance altogether when expenses absorb household income, making a Chapter 13 payment plan an impossibility. This would increase the likelihood that they would lose their homes to foreclosure and cars to repossession in Chapter 13.
While balanced reforms need to be made to prevent abuse of the bankruptcy system by debtors while making the system fairer for the debtor, these draconian measures are not needed. This wayward, misguided piece of legislation is based on misperception and falsehood. Contrary to the claims of the bill's proponents, the American bankruptcy system is NOT fraught with fraud and abuse warranting these reforms. The latest research reveals that only 4-10 percent of personal bankruptcy cases are filed in bad faith. And the number of personal bankruptcies is NOT on the rise, necessitating legislation. According to data supplied by the Administrative Office of U.S. Courts, personal bankruptcies dropped by more than 100,000 in 1999 compared to 1998. They have continued to decline for all three quarters of this year.
It says in Deuteronomy, "If there is among you anyone in need, a member of your community in any of your towns within the land that the Lord your God is giving you, do not be hard-hearted or tight-fisted toward your needy neighbor. You should rather open your hand, willingly lending enough to meet the need, whatever it may be." (Deut. 15:7-9) Caring for the poor is more than an American value. For many people of faith, helping the poor is a sacred responsibility. And the more closely we look at this legislation, the more clearly we see that it would contradict the mandates of our common moral heritage and would gravely damage the well-being of so many who are struggling to survive financial reversals. This legislation flies in the face of our prophetic call to economic justice.
We call on the Senate to join us. Join us in championing the poor and the needy. Join us in assisting low-income Americans to repair their lives after financial disaster. Join us, in these final days, in doing everything in your power to stop the passage of this legislation.
Rabbi David Saperstein
Director, Religious Action Center of Reform Judaism
The Religious Action Center of Reform Judaism is the Washington office of the Union of American Hebrew Congregations (UAHC), whose 900 congregations across North America encompass 1.5 million Reform Jews, and the Central Conference of American Rabbis (CCAR) whose membership includes over 1700 Reform rabbis.