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.