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House Pushes Senate To OK Bankruptcy Bill

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NU Online News Service, Jan. 29, 2004, 5:11 p.m. EST – House Republicans are trying to use a popular farm bankruptcy bill to get a general bankruptcy bill through the Senate.[@@]

House members voted 265-99 Wednesday to add the general bankruptcy bill, H.R. 975, to S. 1920, its version of an agriculture bankruptcy reform bill that started in the Senate.

Some Democratic senators have argued that H.R. 975 helps credit card companies at the expense of consumers who have a hard time resisting the urge to accumulate credit card debt. Other Democratic senators say a general bankruptcy reform bill should include a provision that would stop abortion protesters from filing for bankruptcy protection to avoid paying protest-related court judgments.

The sponsor of H.R. 975 is Rep. F. James Sensenbrenner Jr., R-Wis., chairman of the House Judiciary Committee.

Sensenbrenner put out a statement welcoming the House decision to add his bill to S. 1920. “The bankruptcy system is broken and gets worse every day,” Sensenbrenner says in the statement.

Dishonest, abusive bankruptcies burden the system and force lenders to charge higher interest rates for all borrowers, Sensenbrenner says.

The text of H.R. 975 that was inserted into S. 1920 includes several major sections of interest to insurers.

One, Section 224, deals with protection of retirement savings in bankruptcy. That section would let individual debtors protect up to $1 million in individual retirement account assets from creditors. Debtors could protect even more IRA assets if some of the assets came from rollovers from employer-sponsored retirement plans.

Section 225 of the bill would let debtors protect some 529 plan college saving and some assets in other types of college savings plans from creditors. But debtors could protect education savings only if the savings were for the benefit of their children, grandchildren, stepchildren, stepgrandchildren or foster children.

Section 323 of the bill would exclude employee benefit plan participants’ contributions and other employee property from an employer’s bankruptcy estate.

More information about S. 1920 is on the Web at