Legislative Highlights Nov 2001
Will Congress "Break Off Some Pieces" of H.R. 333?
With the omnibus bankruptcy bill stalled and not likely to move in its current form, one question is whether Congress will attempt to salvage some parts of the package. It is possible key members of Congress could reach a consensus to move some of the less controversial items, either individually or as a package. No decisions are likely to be made before the end of the first session of the 107th Congress this fall.
Candidates for this treatment could ultimately include a permanent (and retroactive) extension of chapter 12 (which has again expired), additional bankruptcy judgeships, Title IX of H.R. 333 dealing with the treatment of certain financial interests in bankruptcy, and a provision on protecting the privacy interests of consumers in cases of bankrupt online retailers. Other possibilities include the transnational title of H.R. 333 dealing with cross-border cases.
While rising unemployment rates and a looming recession make prospects for a muscular, pro-creditor consumer bankruptcy less likely now, some insiders may be willing to reconsider a "stripped-down" reform in lieu of H.R. 333-style means-testing, focusing instead on issues such as a consumer creditor's right to directly bring a motion under §707(b) of the Code.
Congress is focused entirely on the twin tasks of prosecuting the war against terrorism and stimulating the domestic economy. All other legislative issues are either taking a back seat or being considered only through the prism of these twin priorities. Though the winds can shift quickly in Washington, it's clear that the bankruptcy bill is one that does not fit the current legislative agenda.