What: All Issues : Aid to Less Advantaged People, at Home & Abroad : The Chronically Ill : S. 256. Bankruptcy/Vote on Amendment to Protect the Homes of Persons Filing for Bankruptcy Due to High Medical Bills (2005 senate Roll Call 17)
 Who: All Members
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S. 256. Bankruptcy/Vote on Amendment to Protect the Homes of Persons Filing for Bankruptcy Due to High Medical Bills
senate Roll Call 17     Mar 02, 2005
Progressive Position:
Yea
Progressive Result:
Loss

In this vote, the Senate defeated an amendment by Edward Kennedy (D-MA) to S. 256, a Republican-sponsored bill to alter federal bankruptcy rules, to provide a "homestead exemption"-a means for someone filing for bankruptcy to shelter his or her home from creditors-of up to $150,000 to individuals whose poor financial condition is the result of a serious medical problem. Current homestead exemptions vary greatly state-by-state, with some states offering no homestead exemption at all. Kennedy's amendment would have uniformly recognized a $150,000 exemption for bankruptcy filers whose serious medical condition was a factor in their financial distress, thereby preventing some people from having to give up their homes in their efforts to try to put their finances in order. On behalf of Progressives, Kennedy argued: "those individuals who are faced with hardship, worked hard all of their lives, more often than not have been able to get health insurance but find out that health insurance is not enough. . . . As a result of cancer, serious heart failure, serious illnesses, diabetes, or a child that needs special kinds of attention, they go in to debt--after it is all said and done, let them list their assets and their liabilities and pay what they need, but don't take their home away from them." Republicans countered that the bill, as written, would curb abuses of the bankruptcy system by making it harder for those who could pay their debts to escape them, and that those who truly couldn't pay would not have to because they wouldn't meet the bill's "means test." (The "means test" would be a test based on the median incomes of individual states, whereby individuals who are determined to have sufficient means or assets would be ordered to repay all debts, while those deemed to have insufficient means would have their debts erased after certain assets are seized.) Kennedy's amendment was one of a series offered by Progressives to limit the bill's scope because they viewed S. 256 as benefiting large corporations, such as credit card companies, at the expense of middle and lower-class Americans. They maintained that S. 256 would actually require individuals who deserve full protection in bankruptcy to overcome additional barriers to getting out of debt, like higher attorneys' fees and more paperwork, and that the true beneficiaries of the legislation would be credit card companies at the expense of consumers. Republicans not only argued that the bill would make it harder for those who could pay their debts to escape them, but also expressed their desire to keep the bill "clean," meaning free from most amendments, because the House had already indicated it would not accept a bankruptcy bill laden with amendment language. Progressives' loss in this amendment by a vote of 39 to 58 was one of numerous losses in their attempts to tilt the balance of S. 256 more toward consumers and away from credit card companies and other creditors.

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