June 18, 1998 | Read Time: 1 minute
Congress has approved legislation to protect churches and other charities from having to give up contributions they receive from donors who declare bankruptcy.
The bill last month passed the Senate, 99 to 1, and this month went on to win the unanimous approval of the House. President Clinton was expected to sign it into law.
Bankruptcy trustees around the country have sued to force churches to turn over donations made as much as several years before a donor filed for bankruptcy protection. Trustees have considered many such gifts to be fraudulent attempts to shield donors’ assets from their creditors.
The new bill would bar trustees from recovering such gifts unless they could show that the donation had been made with fraudulent intent. A debtor could continue to give up to 15 per cent of his income to a church or charity, as long as the gifts were consistent with his previous practice.
