A Quiet Attack on Women

by Prof. Elizabeth Warren, Harvard Law School
New York Times Op Ed, May 20, 2002

Women's rights are suddenly at the center of the Congressional debate over the nation's bankruptcy laws—but only in the most cynical and opportunistic way. After five years of enormous contributions and lobbying from the financial industry, Congress now stands ready to dismantle protection for families under the nation's Bankruptcy Code.

Banking and credit lobbyists have been trying to change the bankruptcy laws for years. The current bill was stuck in conference between the Senate and House until Senator Joseph Biden of Delaware—where many banks and credit-card issuers are incorporated&3151;agreed to vote with Republicans on almost all the issues that were holding up the bill. But Mr. Biden also told his Democratic colleagues that he would support an amendment to stop abortion protesters from using bankruptcy protection to avoid damages they might otherwise have to pay for violating federal law in violent clinic protests.

Regardless of one's views of the amendment, the bill itself is unconscionable. If it becomes law, the economic effects on more than 1.2 million women each year will be devastating.

In the past 20 years, bankruptcy filings for female-headed households have increased at more than double the rate of bankruptcies for comparable households with an adult male present. (Families with children are more economically vulnerable than those without, and since women keep the children more often in the case of divorce, more women are filing for bankruptcy.) Women—married, divorced, widowed and single—now outnumber men seeking bankruptcy protection by more than 300,000 a year. The more than one million women filing for bankruptcy protection this year will bring nearly two million children into bankruptcy court with them.

Most of these women will be in bankruptcy court for reasons beyond their control. More than 90 percent of women who file for bankruptcy have been hit by some combination of unemployment, medical bills and divorce. Women are more likely than men to seek bankruptcy in the aftermath of a divorce or a medical problem, though both men and women cite job problems as the biggest difficulty.

At the same time, 200,000 women will find themselves in bankruptcy court not as debtors but as creditors—trying to collect alimony or child support from their ex-husbands. Traditionally, alimony and child support are nondischargeable, which means these debts must be repaid even if the ex-husband files for bankruptcy, because women and children, unlike commercial creditors who can choose their debtors, cannot charge their husbands or fathers a premium for being bad credit risks.

Yet in the pending legislation, credit-card companies and car lenders have devised a number of ways to ensure that more of their debt, including interest and penalties, is made similarly sacrosanct and payable forever. This puts divorced women in direct competition with credit-card companies for some of an ex-husband's limited income.

Some 30 women's groups, from the National Organization for Women to Hadassah to the Y.W.C.A., have announced their opposition to this bill. Do politicians like Mr. Biden who support the bankruptcy bill believe they can give credit-card companies the right to elbow out women and children so long as they rally behind an issue like abortion? The message is unmistakable: On an economic issue that attracts millions of dollars of industry support, women have no real political importance.

Will the credit industry's bankruptcy bill pass the conference? Or will it stall over the issue of abortion? If Senator Charles Schumer, who wrote the abortion provision in the Senate bill, holds his ground, he will do a great service to the women who have fought hard for their rights to access to abortion clinics. But if the amendment prevents the bill's passage, he will do an even greater service to hundreds of thousands of women trying to collect child support and to millions more who are trying to survive after financial disaster.

Bankruptcy and Abortion

Wall Street Journal Editorial, May 2, 2002

We refer to the bankruptcy reform bill, versions of which both the House and Senate passed last year and which is now ready to emerge from conference. All ready, that is, except for the little extraneous matter of abortion. For some Democrats, it seems, their abortion-rights constituency trumps their financial-services contributors.

The specific Senator to ask about this is New York Democrat Charles Schumer; he's attached a rider to the bankruptcy bill saying people who obstruct abortion clinics could not escape from paying their fines or out-of-court settlements by declaring bankruptcy. This is billed as a move to curtail violence at abortion clinics.

Sounds good, right? In fact, Mr. Schumer's rider would do no such thing. We can find no reported case of anyone who has committed a willful and malicious act of violence at an abortion clinic ever using bankruptcy to this end. According to the Congressional Research Service such debts are not dischargeable under current bankruptcy law—nor would they be dischargeable under the new law.

House conferees, led by Illinois's Henry Hyde, are concerned that the broad language of the abortion rider would also apply to non-violent protests and would penalize peaceful opponents of abortion. But they've nonetheless offered compromise language.

Mr. Schumer has refused all such entreaties. Abortion-rights lobbyists' clout is such that they're even holding sway over Democratic conferee Joe Biden, who represents a state (Delaware) with a slew of financial-services companies.

The casualty of all this could be a bankruptcy reform well worth passing. The bill addresses the issue of personal bankruptcies, which increased sharply in the mid-1990s. In essence, the legislation would make it harder for most debtors to wipe out their debt completely under chapter 7 of the U.S. Bankruptcy Code. Instead, it would require more debtors to file under chapter 13, requiring them to repay some portion of their debt over five years under a court-supervised plan.

Despite protests from some self-proclaimed consumer advocates, the bankruptcy reform won't revive Victorian-style debtors' prisons. There are many consumer protections written into the bill, including safeguards for retirement savings, child-support payments and education savings accounts. Most Democrats must agree, because it passed both the House and Senate comfortably.

Pro-Life Protesters' Misuse of Bankruptcy Laws

by Sen. Charles Schumer (D-N.Y.)
Wall Street Journal Letter, May 10, 2002

To portray Rep. Henry Hyde as moderate on abortion and the FACE provision in the bankruptcy bill as extreme is to turn black into white and white into black.

The FACE amendment is a compromise I forged with pro-life Sen. Orrin Hatch that would keep people who impede access to family planning facilities from avoiding fines or out-of-court settlements by declaring bankruptcy. It has passed the Senate twice by overwhelming, bipartisan margins.

Your editorial also misses the mark when it says that there is no case history of pro-life protesters using the Bankruptcy Code to get out of paying clinic violence debts. Operation Rescue's founder Randall Terry has openly acknowledged using the Bankruptcy Code to avoid paying debts arising from clinic violence, setting a dangerous precedent that others have followed. Six defendants in the "Nuremberg Files" web site case filed for bankruptcy, five of whom filed immediately preceding depositions in which they would have had to reveal information regarding their assets. The other filed just before garnishment could be executed. Finally, anti-choice activists Rev. Robert Behn and Bonnie Behn filed for bankruptcy in March 1999, citing a $35,000 debt they incurred as a result of Mrs. Behn's violation of a temporary restraining order from Buffalo GYN Womenservices.

While I am wholly committed to passing a bankruptcy bill, having voted for it twice, I'm not willing to do so at the expense of this amendment.

Letter to the Editor

by Rep. Henry J. Hyde (R-Ill.)
Wall Street Journal Letter, May 14, 2002

In a letter defending his abortion-clinic amendment to the bankruptcy reform bill, Sen. Charles Schumer accuses me of wanting to help pro-life protestors "to get out of paying clinic violence debts." But our disagreement is not about debts arising from "violence." On the contrary, it is about whether to impose the extreme penalty of non-dischargeability on peaceful protestors who may have committed nonviolent misdemeanors, violations of local ordinances or similar infractions. Nobody denies that nonviolent offenders should be held accountable for their offenses; the dispute is about whether the punishment should include losing their family homes should they ever have to file bankruptcy.

Let's be clear about this. The Schumer Amendment applies to all forms of protest including peaceful, nonviolent activities such as sit-ins, boycotts or blockades. Additionally, there is not a single reported instance where an abortion protester has filed bankruptcy and been able to discharge debts based on violent acts. Therefore, Sen. Schumer's example of Operation Rescue founder Randall Terry is nothing more than a smokescreen.

I'm beginning to wonder if Sen. Schumer wants the bankruptcy reform bill at all. House conferees have offered to make debts arising from violent acts—whether committed against abortion providers or against anyone else—non-dischargeable in bankruptcy.

Sen. Schumer has rejected these offers.ïHe has made clear that no compromise is acceptable unless it imposes the extreme penalty of non-dischargeability on persons who have committed nonviolent offenses against abortion clinics and other "providers of lawful goods and services." Meanwhile, a reckless driver who is ordered to pay damages for wrongful death would be able to discharge this debt. Therefore, Sen. Schumer's provision is not only disproportionate and harsh, but also grossly inequitable.