What: All Issues : Justice for All: Civil and Criminal : Equal Access to Justice : S. 256. Bankruptcy/Vote on Amendment to Prohibit Very Wealthy Individuals from Sheltering Their Assets in Trusts and Declaring Bankruptcy to be Relieved of Debts.
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S. 256. Bankruptcy/Vote on Amendment to Prohibit Very Wealthy Individuals from Sheltering Their Assets in Trusts and Declaring Bankruptcy to be Relieved of Debts.
senate Roll Call 41     Mar 10, 2005
Y = Conservative
N = Progressive
Winning Side:
Conservative

In this vote, the Senate defeated an amendment by Charles Schumer (D-NY) to S. 256 that would have prohibited very wealthy individuals trying to escape debts by declaring bankruptcy from sheltering their assets in a trust to protect them from creditors. S. 256 was a Republican-sponsored bill to alter federal bankruptcy rules. On behalf of Progressives and other Democrats, Schumer argued, "[i]t is outrageous that someone worth millions or billions of dollars can declare bankruptcy and then shield their assets in this trust so they do not come before the bankruptcy court. . . . [W]e are talking about people who make $45,000 and we are going after them [in this bankruptcy bill], yet we are allowing millionaires and billionaires to use this loophole. . . . It would be hypocritical to say we have to close abuses on middle-income people and not close abuses on the very wealthy." Republicans countered that more time was needed to determine how often this type of abuse really occurs. Schumer offered this amendment as a "fix" for another amendment addressing the same problem that had been offered by James Talent (R-MO). Talent's amendment contained similar language but would have required a showing of intent to defraud in order for someone to be convicted of sheltering assets in this type of trust. Schumer asserted that the Talent amendment was actually a "subterfuge," explaining that anyone trying to hide assets illegally to avoid seizure in bankruptcy would be careful to cover their tracks and leave no paper trail that might be used to prove intent to defraud. Conservatives countered that Talent's amendment focused on fraud, which was the real issue, and that Schumer's amendment was too broad. The Senate defeated the Schumer amendment by a vote of 43 to 56. Thus, broad language intended to ensure that wealthy people could not hide considerable assets in trusts to prevent those assets from being seized in the course of a bankruptcy was not included in the bill.

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