Bankruptcy Bill Awards Huge Payoff to Credit Card Companies

April 15, 2005

"Once again George W. Bush and his Congressional enablers have chosen to reward their corporate allies at the expense of low- and middle- income working people, women trying to collect past due support, single mothers, people of color, families hit by high medical bills, veterans and the elderly," said NOW President Kim Gandy. "This law further shreds the safety net, even for people brought to financial ruin by illness or divorce."

In a 302 to 126 vote on Wednesday, Congress passed a federal bankruptcy bill that rewards credit card companies but has disastrous consequences for individuals caught in a financial trap. Bush said gleefully that he supports this legislation — which is a boon to many of his campaign contributors — and anxiously awaits signing it into law.

"Congress is once again squeezing families in crisis, but without closing any of the legal loopholes that let corporate executives to skirt their debts," Gandy said.

Parents who are owed child support were also dealt a huge blow with the passage of this bill. They are now forced to compete head-to-head with credit card companies and their stable of lawyers and collection agents. This bill removes the payment priority which favored past due alimony and child support judgments — instead placing child support and alimony on equal footing with other debts.

"The industry that recklessly passes out credit cards like candy has now ensured that it gets paid before single parents receive the child support they are owed," Gandy said. "Have corporate IOUs taken precedence over our children's welfare?"

The Republican majority shut down all amendments proposed by Democrats, including an amendment to prevent civil rights violators, including people who commit violence at abortion clinics, from declaring bankruptcy to wipe out court-ordered judgments. Additionally, they voted against helping individuals who are forced into bankruptcy by illnesses, or because of debts run up by a spouse who died or deserted them.

"This is one more notch in the President's belt as he continues his war on women, children and families," Gandy said.

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