WASHINGTON – Americans for Tax Reform (ATR) President Grover Norquist praised House members today for passing necessary Bankruptcy Reform. H.R. 975, the Bankruptcy Abuse Prevention and Consumer Protection Act was introduced by Representative James Sensenbrenner (R-WI) and passed the House by a vote of 315 to 113. Similar bankruptcy reform passed both the House and Senate last year with broad bipartisan support.

The last few years have seen record levels of bankruptcy filing among individuals. In 1996, the number of personal bankruptcy cases exceeded one million for the first time in history. Just one year later, the number of bankruptcy petitions in the U.S. had risen by 20 percent. Current bankruptcy filings are now at triple the levels of the early 1980s. Many of these bankruptcies can be traced to lenient state bankruptcy laws.

"Passage of this legislation is essential to reforming the country\’s overburdened bankruptcy system," said Grover Norquist, President of ATR. "The legislation slows the rise of bankruptcy cases in the United States by placing restrictions on those who qualify to file for bankruptcy and educating debtors on how to better handle their financial responsibilities."

Over 70 percent of bankruptcy filers choose to petition under Chapter 7 of the Bankruptcy Code which erases nearly all debt, even in cases where high-income filers could afford to pay at least part of what they owe.

The Bankruptcy Abuse Prevention and Consumer Protection Act restricts Chapter 7 filing, and requires those who can repay some of what they owe to do it. It also closes loopholes that allow some debtors to evade child support and alimony payments. In addition, the bill ensures debtors explore other financial management options such as credit counseling prior to filing for bankruptcy. Finally, it establishes penalties for creditors who do not make good-faith efforts to reach settlement with debtors outside of the bankruptcy system.

"The House has taken an important step toward combating the growing number of bankruptcy cases in the Unites States," said Norquist. "I am also extremely pleased that House did not include the irrelevant provision attached to the Senate version of the bill last year by Sen. Charles E. Schumer (D-NY) that prevents pro-life advocates who have been fined from having those penalties erased in bankruptcy."

Bankruptcy reform is one of the most important issues that we face in the United States. The Senate should now follow the House of Representatives\’ lead and quickly pass this needed legislation.