New bankruptcy reform legislation doesn't affect gambling debts

SUN STAFF AND WIRE REPORTS

WASHINGTON -- The Senate Judiciary Committee is moving to overhaul bankruptcy laws, but has delayed for two weeks its vote on legislation after Democrats insisted on more time to mount their opposition and offer changes.

The bill's sponsor, Republican Sen. Charles Grassley of Iowa, said he hopes the committee will approve the legislation and send it to the full Senate on Feb. 27.

"This is unfinished business," Grassley said. "It isn't new stuff."

The bill is designed to stem what its supporters say are abuses of the bankruptcy system. It would prohibit most individuals whose income is above the state median from filing for bankruptcy under a section of the law that allows them to escape liability for credit card and other unsecured debt.

Grassley and other supporters are trying to keep the legislation nearly identical to the bill that passed the House and Senate last year only to be vetoed by then-President Bill Clinton. Republicans said President George Bush probably will sign the bill. They said they fear changing it will undo compromises that have been struck over the past four years.

Democratic opponents said they aren't interested in helping supporters of the bill preserve their coalition.

California Democrat Dianne Feinstein said she would offer amendments intended to help strike an "adequate balance between debtors and creditors."

Among the amendments Feinstein said she would offer is one to require credit card companies to tell each customer how long it would take them to pay off their debt if they made only the minimum payment each month. As drafted, the legislation only requires a generic warning against only making minimum payments.

Under the committee's rules, any member can request that an agenda item be delayed.

The House Judiciary Committee approved the legislation last week.

One item that does not appear in the bill is language blocking casinos from collecting on gambling debts of bankrupt patrons. This language emerged in early forms of bankruptcy reform legislation in 1998, but was successfully killed by gaming interests.

Both the Nevada Resort Association and American Gaming Association say they haven't seen any similar items in the current bankruptcy bill.

"In the past, that's been the case too, and it was introduced later on," said Wayne Mehl, Washington lobbyist for the NRA. "We just keep watching as (amendments) come in ... (but) we're comfortable with it as it's now written."

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