What: All Issues : Government Checks on Corporate Power : Banks/Credit Card Companies : S. 256. Bankruptcy/Vote on Amendment to Clarify "Means Test" for Persons Filing for Bankruptcy in Republican-Sponsored Bill to Alter Federal Bankruptcy Rules.
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S. 256. Bankruptcy/Vote on Amendment to Clarify "Means Test" for Persons Filing for Bankruptcy in Republican-Sponsored Bill to Alter Federal Bankruptcy Rules.
senate Roll Call 31     Mar 09, 2005
Y = Conservative
N = Progressive
Winning Side:

In this vote, the Senate defeated an amendment by Richard Durbin (D-IL) to clarify that a key provision of S. 256 would "not apply to debtors who go into bankruptcy court whose incomes fall below the median level." (Durbin.) S. 256 was a Republican-drafted bill to alter federal bankruptcy laws. It proposed to impose a "means test" based on the median incomes of individual states on bankruptcy filers, meaning that individuals who are determined to have sufficient means-assets-would be ordered to repay all debts, while those deemed to have insufficient means would have their debts erased after certain assets are seized. Durbin's amendment would have eliminated the additional paperwork required by S. 256 for individuals claiming to fall below the levels required by the means test. Making the Progressive argument, Durbin stated that his amendment would merely "make[] it clear that those lower income debtors only have to show the court, first, the documentation already required under chapter 7 [of federal bankruptcy law], and then their monthly income. Once they show the monthly income, if it is below the median income in that area, they are exempt from the means test. That is all my amendment says." Republicans countered that the bill as drafted already stated clearly that bankruptcy filers who fall below the state median income would not be subject to the means test. Further, they argued that Durbin's amendment did not require any proof from a filer claiming low income; rather, they asserted, the amendment would have the government just "take their word for it. That seems to open the door to the fraud this bill is designed to prevent." (Orrin Hatch (R-UT).) Durbin's amendment was one of a series offered by Progressives to limit the bill's scope because overall, they viewed S. 256 as benefiting large corporations, such as credit card companies, at the expense of middle and lower-class Americans. They maintained that S. 256 would actually require individuals who deserve full protection in bankruptcy to overcome additional barriers to getting out of debt, like higher attorneys' fees and more paperwork. Republicans countered that the bill would curb abuses of the bankruptcy system by making it harder for those who could pay their debts to escape them. In addition, Republicans were anxious to keep the bill "clean," meaning free from most amendments, because the House had already indicated it would not accept a bankruptcy bill laden with amendment language. Progressives' loss in this amendment by a vote of 42 to 58 meant that individuals claiming to fall below the means test would have to file additional paperwork to prove their claims.

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