New Democrats Provide Key Support For Bankruptcy Reform

WASHINGTON, DC-- Members of the New Democrat Coalition (NDC), a group of 70 centrist, pro-growth Democratic members of the House of Representatives, today provided key Democratic votes for legislation to overhaul the nation's bankruptcy laws. New Democrats cosponsored the legislation, which places a new emphasis on personal accountability and requires some individuals to enter repayment plans, and helped "whip" Democratic votes to secure passage.

The House of Representatives today approved the legislation, H.R. 333, by a vote of 306-108. New Democrats provided 51 of the 93 Democratic votes in support of the plan. The measure, which is nearly identical to a measure approved last year with strong New Democrat support, imposes a needs-based formula to move more bankruptcy filers into repayment plans under Chapter 13, based on their ability to pay.

The legislation reflects the New Democrat principle of greater personal responsibility by ensuring that those who have the ability to pay off some of their debt do so, and reaffirming that bankruptcy should be a last resort instead of a first option. The bill also supports consumers by reducing irresponsible bankruptcy filings, which have the effect of raising prices for consumers and threatening equal access to credit. President Bush has indicated that he will sign a bankruptcy reform measure into law should it be approved by both the House and Senate.

NDC Co-Chair Rep. James Moran (VA) remarked, "The overwhelming bipartisan support for this legislation represents the culmination of more than four years of work at promoting common sense bankruptcy reform based on the principles of fairness and personal responsibility. I am pleased that this legislation provides several key consumer protection provisions, including a 'debtors bill or rights,' that were endorsed by New Democrats."

"Bankruptcy was never intended as a financial planning tool or mere convenience," NDC Co-Chair Rep. Cal Dooley said. "New Democrats helped secure passage for this measure because we strongly believe it will encourage greater personal responsibility on the part of borrowers."

NDC Co-Chair Rep. Tim Roemer (IN) said, "This bill promotes personal responsibility. Families declaring bankruptcy need a safety net for a fresh start following a devastating financial loss. But bankruptcy should not be a loophole that allows someone to run up debts and then walk away from them."

"Reforming bankruptcy laws is all about personal responsibility," said NDC Communications Coordinator Rep. Adam Smith (WA). "People who can afford to repay their debts should do so."

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