It is probably no surprise to anyone familiar with today's economy; bankruptcy filings are at an all time high. A fact perhaps not as widely known, is that single women are the fastest growing group of bankruptcy filers and outnumber single men filing alone, as well as married couples. Women - married, divorced, widowed and single, now outnumber men seeking bankruptcy protection by more than 300,000 per year. This year, more than one million American women will be filing for bankruptcy. According to the American Bankruptcy Institute, the number of women filing for bankruptcy has been dramatically increasing since 1981, at that time; they comprised the smallest group of filers, approximately only 17% of all filings. By the end of 1999, women represented roughly 40% of filers.
This steep incline in the number of women filers can likely be attributed to a variety of reasons. Women after divorce are more likely to become responsible for care of the children, leaving them as single parents, more vulnerable to effects of our ailing economy. Also, despite some improvement in recent years, there still exists a marked income disparity between men and women. Women often find themselves in relatively low paying jobs as compared to their male counter-parts, however they may qualify for high limit credit cards based on additional income from child support, or alimony.
In my law practice I commonly file bankruptcy for women seeking understanding of the dilemma which led them to bankruptcy. In addition to the most common occurrences, such as unemployment, medical difficulties and divorce, women with dependent children also face the possibility of an ex-spouse becoming unable or refusing to make child support, or alimony payments. "I was doing fine", one women told me, until he just stopped making child-support payments, I started court proceedings right away, but it takes a long time, what was I to do in the meantime? My job income just wasn't enough, so I had to use the charge cards to get by. According to the United States office of Child Support enforcement, women in divorce are often granted inadequate support payments and sixty percent are unable to collect what they are awarded.
As tough as times are for single moms now, if the banking and credit card industry has its way, things are about to get a lot tougher. For years, Congress has been debating over proposed changes to the Nations bankruptcy laws. The so-called bankruptcy "reform" bill would provide for tighter restrictions on bankruptcy filers with the alleged purpose of curbing bankruptcy abuse by filers who actually can afford to pay back at least a portion of their debt. The legislation, which has been stalled due to relatively minor differences in the House and Senates version of the Bill, is likely to become law in the very near future. President Bush has already stated that once the differences are worked out, he will sign the Bill. Once these reforms are passed, they may indeed help to prevent bankruptcy abuse by deterring a relatively small number of irresponsible individuals who would otherwise have gotten away with bad faith filings. At the same time however, it will have a devastating impact upon millions of American women and their children who are making an honest effort to stabilize their economic situations.
Of the more than one million women filing for bankruptcy protection this year, approximately 200,000 women will appear in bankruptcy court not as debtor's, but as creditors seeking payment of child support or alimony. In 1997, based on information collected from 16 judicial districts around the country, an estimated 243,000 to 325,00 bankruptcy cases involved child support and alimony orders.
Under current bankruptcy law, child support and alimony payments are given a priority, in that they are "non-dischargable," meaning that they cannot be eliminated by bankruptcy. The pending bankruptcy legislation is filled with language that would ensure that more of the debt owed to credit card companies and lenders would be similarly difficult to discharge, in some situations placing it on an equal footing with child support and alimony, thus placing women and their children in direct competition with credit card companies for an ex-husbands limited income.
The inevitable, result of this change will cause credit card companies to recover a few more dollars from bankrupt ex-husbands, while ex-wives will find it much harder to recover past due child support. Additionally, because of limited funds it will also mean that bankrupt ex-husbands will find it harder to keep current on monthly child support and alimony.
Ironically, the senate version of the Bill includes language that would protect women's rights by preventing abortion opponents from declaring bankruptcy to rid themselves of court fines and damages they might otherwise have to pay for violating federal law in violent clinic protests. This particular provision has raised a significant amount of debate and has caused as a distraction to what may in fact be a much more important issue. Regardless of the abortion issue, the bankruptcy reform legislation is a harsh measure that would allow credit card companies to squeeze a few more dollars out of those Americans who can least afford it. If the bankruptcy reform bill is passed it will have devastating financial consequences upon the more than two million women and their children every year who rely upon child support and alimony payments for survival. For a more detailed analysis of this legislation, contact the National Organization for Women at (202) 628-8669, or The National Women's Law Center: http://www.nwlc.org.
