WASHINGTON — Republican senators continued their steady drive toward passing more stringent bankruptcy legislation Wednesday, knocking down a series of Democrat-sponsored amendments to exempt seniors and those facing medical hardship from some of its provisions.
The bill, expected to pass the Senate next week, would impose new hurdles on those seeking to erase their debts through bankruptcy in an effort to force more Americans to pay back more of what they owe.
The measure has been a longtime priority for banks and credit card companies. They argue that the costs of the country's increased number of personal bankruptcies gets passed on to credit-worthy consumers in the form of fees and higher interest rates.
During Senate debate this week, Democrats have proposed a series of amendments they say are necessary to protect lower-income consumers, especially the sick and elderly and those who fall victim to fraud or aggressive marketing by credit companies.
But in largely party-line votes, Republicans have defeated the proposed changes, arguing that the bill's main provisions are not punitive. Also, House GOP leaders have said their chamber would not pass a bill containing the Democratic amendments.
On Wednesday, five of the amendments were voted down.
"The only way we are going to change bankruptcy is by passing this bill. And the only way to pass this bill is to pass it without any amendments," said Sen. Orrin G. Hatch (R-Utah).
The bill's central provision would require debtors to pass a "means test" to determine whether they had adequate assets to pay back at least some of their debts. Those with incomes below the median level in their state would be allowed to apply for debt forgiveness, but those making above the median would have to develop a repayment plan. The median annual household income in California is about $50,000.
"It is simply too easy for some mostly high-income debtors to simply wipe away their debts by filing for bankruptcy," Hatch said during the Senate debate.
Two amendments proposed by Sen. Edward M. Kennedy (D-Mass.) sought to protect Americans facing medical hardship. The first would have exempted from the means test those who faced bankruptcy from medical bills. The second would have protected $150,000 of the value of patients' homes from being seized to pay creditors.
