Senate Bill would Shield Tithing from Bankruptcy

by Mike Bevel, CollectionIndustry.com

Led by Utah Senator Orrin Hatch, the Senate has unanimously approved legislation that would protect the tithing rights of individuals who have applied for bankruptcy. Previously, federal tax statutes claimed that individuals who had declared bankruptcy had an obligation to pay back their creditors before they could resume making financial contributions to their religion.

“As a rule, I do not like impromptu legislative responses to judicial decisions,” Hatch said in a statement. “But the religious practices and beliefs of individuals should not be subject to the whims of judicial interpretation. This bill ensures those who tithe can continue to live their faith while in bankruptcy.”

That?s not the issue, as some critics of the reversal see it. Some bankruptcy filers use the shelter of religious tithing to protect financial assets. The ruling from August would seemingly put an end to this alleged loophole.

The bill still must pass the House and be signed by the president before it becomes law.