Senate passes S.625 Most of the protection afforded debtors by Chapter 7 will be removed when this bill is signed into law.

 

November 1999 It appears that the bankruptcy reform bill S.625 has again been put on a back burner, if not killed outright by the U.S. Senate.  A large number of anti-consumer provisions were passed, but the amendments to prohibit credit card companies from soliciting teenagers and regarding predatory lending practices were defeated. This shows where the lobbying dollars are going!  The earliest time for further consideration will be Feb. 2000.  The president has threatened a veto in any event, but anything that does go through will probably be veto-proof.  Stay tuned for further developments.

 

October 1999 As far as bankruptcy reform legislation is concerned; the Republican leadership invoked a rule to cut off debate in the Senate, the vote was along strict party lines with 45 democrats voting against it.  Without the necessary 60 votes, the debate would potentially go on for ever, so the whole reform bill was set aside for another day. Trent Lott stated he would bring it up again, but it's likely that the same result would come about.  Given the fact that the credit card industry has spent nearly FIFTY MILLION dollars on lobbying efforts, we can expect that this will come up again; probably right before the next elections in November 2000.

 
 

September 1999 Bankruptcy "reform" will be taken up by the U.S. Senate right after the Labor Day recess. It [H.R. 833] has passed the House of Representatives by a veto proof margin, though the Senate will probably be more circumspect. Even if it does pass there, it must then go to the conference committee for a work out of the differences, which are substantial.  Finally, it has to go back to both chambers for, in all probability, a voice vote. Thus, it is very tough to put a time table on this new law. Nevertheless, two provisions that should be of great concern are: first; the means testing section that limits the availability of Chapter 7 relief to many, many debtors, and second; the provision which required credit counseling prior to filing for relief.

 

March 2000 Bankruptcy "reform" has, which everyone had given up as dead, has been taken up again by the Senate and though not passed last year it looks like it will pass in the near futre.  This is largely due to the veto proof passage by the House and the willingness of the Senate to agree. The new law will substantially restrict the availability of chapter 7 to many persons who could file it under present law.  It will require them to be in chapter 13 or 11, if at all.  Given the harsh new provisions of chapter 13, with longer payment periods, and an abolition of lien stripping, chapter 11 may now look more attractive to consumers.The only good news is that the legislation will almost certainly have a 6 month period, after enactment, before it becomes effective, during which some degree of planning may be accomplished.

 

NOVEMBER 2002 Bankruptcy "reform" legislation was not passed in the "lame duck" session that just ended.  Therefore, it will have to start over again when the Congress resumes in early 2003.  The only motivation for passage of this bill is the money that members can get  in the form of campaign contributions.  After more than 4 years of debate and discussion it appears that the credit card companies are begining to realize that they can't recoup  money from people that don't have it.  This may mean that they may not push so hard next year, who knows.