US Senator Biden speaks on Bankruptcy Reform Act (Bill S. 420)
THE BANKRUPTCY BILL WILL NOT DISADVANTAGE WOMEN AND CHILDREN -- (Senate -
March 15, 2001)
Mr. BIDEN. [snip]
As I have indicated, I have heard a lot in recent days about how this bill lacks compassion--specifically, that it will hurt women and children who depend on alimony or child support. The critics claim that by making sure more money is paid back to other creditors, this bill will make it harder for women and children to get payments that should be coming to them through alimony and child support.
Mr. President, I am particularly proud of my record in protecting women and children during my 28-year career in the Senate. I am most proud of my work in drafting and passing the Violence Against Women Act, to protect women who are victims of domestic violence and all violence. I am also proud of my work to track down and hold responsible deadbeat dads .
As long ago as 1992, I was on the Senate Democratic task force for child support enforcement. While I was chairman of the Senate Judiciary Committee, we enacted two major child support initiatives. As far as I am concerned, this bill is an extension of years of work on my part and others' to protect and enhance family support enforcement.
I am here today to show that, contrary to a lot of the rhetoric we have heard tossed around on this floor over the last couple weeks, this bill actually improves the situation of women and children who depend upon child support. I specifically would like to speak to how this bill targets the problems they now face under the current bankruptcy law and turns the bankruptcy system into a virtual extension of the current national family support collection system.
S. 420, the bill we just passed, is so far superior to current law that the National Child Support Enforcement Association, representing 60,000 child support professionals, supports it. These are the people from Salt Lake City to Wilmington, DE, in their family courts or whatever you call them in your respective States, who have the job of collecting support that is ordered by the court or agreed to in a settlement by a father for his children. Sometimes it is a mother, but overwhelmingly it is the father who has a support requirement to take care of the financial needs of the children who are with the mother. These are 60,000 child support professionals, hardly harsh people.
The National Council for Child Support Directors supports the legislation we just passed.
S. 420 is so far superior to current law that the National Association of Attorneys General supports this law. The association's letter of support is personally signed by 27 State attorneys general.
The attorney general of the State of Vermont endorses the family support protection in this legislation.
The attorney general of Minnesota endorses this law, along with the attorneys general of Illinois, Massachusetts, California, Montana, North Carolina, Michigan, Maryland, Iowa, Hawaii, and Washington.
S. 420, the bill we passed tonight, is so far superior to current law that the National District Attorneys Association, representing more than 7,000 local prosecutors, supports this legislation.
In particular, California embraces this bill, the California Family Support Council, whose 2,500 enforcement professionals carry out the child support program in California. The California District Attorneys Association, consisting of elected district attorneys from each and every one of California's 58 counties and over 2,500 deputy district attorneys--they all support this bill that we were told is so heartless to children and women.
Support enforcement professionals west of the Mississippi support this bill. The Western Interstate Child Support Enforcement Council, composed of child support professionals from the private as well as the public sector west of the Mississippi, wanted this bill passed.
Finally, the corporation counsel of the City of New York supports the domestic support provisions. Yes, even New York City loves this bill.
Why has this legislation earned such overwhelming support from professionals who are out in the field, who are in the trenches trying to collect money from regular dads and deadbeat dads who owe child support for their children or alimony to their wives if this is such a compassionless bill? They support it because the system is broken and this bill fixes it.
When a deadbeat dad files for bankruptcy under the current system, what happens to mom and the kids? If the dad is actually making payments, those payments stop. They stop now. That is right, the payments stop cold. Mom then has to find a lawyer or a government advocate, take time off from work, go to the bankruptcy court, and try to get those payments started again.
When she goes to court, her claim may not be heard that day, so she will have to return again. If she is late, she will miss her day in court. In the meantime, the kids are getting no support payments.
This bill changes all that. She will be paid, and her children will get their child support payments while every other creditor has to wait for the bankruptcy court proceedings to unfold. This is a major improvement over current law.
Rather than putting women at a disadvantage, this bill empowers women. It gives them a say in the bankruptcy proceedings relating to her absent spouse. Once a father is under a bankruptcy plan and he fails to make his support payments, a mother can march to bankruptcy court and ask the court to dismiss his bankruptcy plan.
The court will call the dad back to explain himself. He does not want to make payments during the bankruptcy plan: that is what he says. That is how it was before. He did not have to do it before. Fine. He can be thrown out of bankruptcy and find himself back at square one.
Under current law, when the dad's bill collectors show up in the bankruptcy court, mom has to fight with them over the child support.
In asserting her claim, she is not the No. 1 collector in the line, nor No. 2, 3, 4, or 5. She is No. 7 in line, the seventh to be paid. The current code handicaps her at the starting line by permitting other bill collectors to beat her in the race to get dad's assets.
Why is this so important? As a practical matter, she does not have to find room in her hectic schedule to make an appearance in bankruptcy court, an intimidating place for most people. She can go to work without interrupting her day. She can run her errands. She can pick up her kids from school and, under this bill, she will automatically be first in line for her support and alimony claim. She will continue to receive her payments during the bankruptcy proceeding.
When we pass this bill, she does not have to work her way through the bankruptcy system; the system will work its way for her, not against her.
Another provision added to this bill in the managers' package was the moment the husband declares bankruptcy, the bankruptcy court is required to file with and notify, immediately, the spouse. So just in case the old man had not mentioned that he has these payments and there is not a record of it, she knows immediately. The court is required to notify the spouse if he files for bankruptcy.
The system will work for the mother. That is the beauty of the bill. It is self-executing. The provisions to be added to the bankruptcy code will function automatically, and that is vital. Women who do not have a lawyer to help them will be most helped by this aspect of the bill.
Under the current code, they have to get an attorney, go to court and assert their claims, and, again, they are No. 7 when they assert their claims.
There are other important ways in which this bill will remove real obstacles to justice that exist in the current bankruptcy law. This bill not only lifts the stay on support payments in bankruptcy--let me emphasize that.
The husband goes into Delaware and files for bankruptcy. What immediately happens is a stay on all the payments he makes occur. The family court wonders why he "ain't" paying. They automatically stay the payment when they get a notice that he has filed for bankruptcy. Bankruptcy can go on for weeks, months--a long time. In the meantime, what does that mother do? How does she feed her children if, in fact, that is her primary source of income for her children?
That is how it works now. That is how it works now in almost every State.
I have an order in my pile of papers. I will refer to the order.
In my home State of Delaware, a woman went to court and requested a restraining order against her abusive husband. He had already filed for bankruptcy. Incredibly, the judge found that under the current bankruptcy code, a proceeding for a domestic abuse restraining order is automatically stayed.
Did my colleagues hear what I just said? This is a woman who says she is being abused. She wants an order to keep her abusive husband away from her.
The husband has filed for bankruptcy, and the court finds that under the current bankruptcy code, a proceeding for a domestic abuse restraining order is automatically stayed "by operation of law."
All those folks who stand on the floor--and I heard them lecture me about how abusive this law is--do not understand the present system and the part we are trying to correct and what we do correct in this bill.
That is right. We have judges out there right now who look at today's bankruptcy code and find that filing bankruptcy stops all other proceedings.
They find we have failed to write an exception for proceedings such as those for domestic violence. They find their hands are tied.
Then they send a woman in here to get the bankruptcy court to lift the automatic stay so she can go back into court and get a stay to keep the abusive husband away from her. This bill permits that restraining order to go forward, while the current law does not do that.
If anyone thinks it is fair, if anyone prefers this state of affairs--and I know the Presiding Officer does not--I guess you will think we passed a bad bill. Personally, I am proud of this bill. I am surprised opponents failed to take note of the important improvements this bill has made for women and children. If they have their way in a conference or when it comes back here, women and children in this country depending on alimony and child support will be robbed of real protections we have in this bill. I think that would be a crime.
This is another way the bill provides women with the resources and the influence they now lack under the current bankruptcy code. Section 219 of the bill requires the U.S. bankruptcy trustee to notify a woman of her rights to use the services of her State child support enforcement agency, and gives her the agency's address and phone number the moment the husband files. Better yet, the trustee, likewise, notifies the agency independently of the woman's claim.
That is striking. The bankruptcy judge is now, if we pass this law, required to notify the child support agency of what is going on, in addition to the woman. A woman who needs help will get information they need because the bankruptcy system is charged with reaching out to family support professionals, acting under the family Federal support collection law, which I helped pass, and putting them at the service of women and children who need these services.
This last item needs stressing because so much has been made about what will happen after someone who owes family support payments comes out of bankruptcy. The claim is that "a more powerful creditor will push women and children aside and strip the dad bare before he can make any payments to his family." That makes for a very moving story. However, it is plain, ordinary fiction. As one of our former colleagues used to say, with his great sense of humor, Senator Simpson of Wyoming, how many times through the years I served on this floor with him in the Judiciary Committee, and he turned and said: I understand the gentleman is entitled to his own opinion, but he is not entitled to his own facts. He is not entitled to his own facts.
The facts are, that after the bankruptcy payment is made, after they have worked out if they are in a chapter 7, afterwards, the bankruptcy trustee is required to notify both the woman and the family support collection professionals about the dad's release from bankruptcy, his last known address, the name and address of his employer, and a list naming all of the bill collectors that will still be there trying to collect from dad. This section helps mother both during and after bankruptcy. The new notification procedures will help a mother and the support enforcement agencies keep track of the father, where he is working, and what other bills he is required to pay. Because of this monitoring, which would be put in place by the bankruptcy system under this bill, mothers and collection agencies can more easily go to court and get that portion of the father's wages that now belong to them. Dad may complete his bankruptcy plan, but his obligations to mom will not stop.
These new procedures guarantee that family support claims of women and children will always receive No. 1 priority during and after bankruptcy. The process for obtaining a portion of the father's wages, through a wage attachment, already guarantees priority to women and children over all other collectors, whoever they are.
Under the wage attachment, the money is taken out of his paycheck before he even sees it. He can't be forced "by powerful creditors" to choose between them and his alimony or child support. These payments are automatic.
Again, the picture of the greedy bill collector, rushing in front, elbowing mom out of line, and the starving children, is a dynamic story-telling device, but it is only that--story telling. It is a plain story. As I said, quoting my friend from Wyoming, everyone is entitled to their own opinion, but not their own facts.
Even if a father does not earn wages, support enforcement agencies still have many tools to ensure that the mother and children get paid. Support enforcement agencies can intercept taxes, unemployment benefits, revoke driver's license, professional recreational licenses, deny passports, institute criminal and contempt proceedings. All of this she is unable to do now because she doesn't know where dad took off to but the bankruptcy court is required, even after he works out a bankruptcy, to tell her, and tell her who the collectors are. That is why, even compared to any imaginary powerful creditor you might be able to conjure up, mother and children have real, tangible, protections and resources at their disposal to bring a first priority claim against father's wages after bankruptcy, or anything else dad has.
Finally, let me conclude where I began, with the enthusiasm for this legislation that we have heard from the folks in the trenches. This is what the National Association of Attorneys General asserts. The bill "improves the treatment of domestic support obligations," and when the current code "obstacles are removed, as this legislation seeks to accomplish, we believe that our State and local support enforcement offices will continue to be able to collect those moneys effectively, regardless of whether the lower priority creditors remain."
The National District Attorneys Association, with more than 7,000 local prosecutors in their membership, is convinced that women and children will not be disadvantaged by this bill. "To the contrary, support collectors have vastly more effective, and meaningful, collection readiness before a bankruptcy case is filed, or after the case is completed, than any other financial institution. It is under the current law, during bankruptcy, that support collectors have the greatest difficulty, because they are in competition with all other creditors for bankruptcy estate assets and because their most effective collection remedies have been stayed. This legislation provides a major improvement to the problems facing child support creditors in bankruptcy proceedings."
I worked very hard to see that many of these things got in the bill. I support enthusiastically the reform that enforcement professionals call for from New York City to California, from Minnesota to Vermont, from Massachusetts to Michigan. I want to save women and children from having to fight their way through a broken bankruptcy system, and even if they get there, they end up seventh in line. I want to make some system work for them and not against them. I believe all those who voted for this bill today voted to do just that. That is why I so strongly supported the bill.