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Reprinted from June 2001 ABI Journal June 1, 2001

Web posted and Copyright © June 1, 2001, American Bankruptcy Institute.

Bush Temporarily Extends Chapter 12

The President signed a bill (H.R. 256) on May 11, 2001, that retroactively and temporarily re-enacts chapter 12 until the end of May (Public Law 107-8). The law expired last June 30. Since then, clerk's offices have been barred from accepting new petitions. A number of districts report that family farmers have had few other options while waiting for relief from Washington. The temporary extension will permit these cases to be filed at least through the end of the month. A permanent extension of chapter 12 is contained in the omnibus bankruptcy legislation.

Reform Bill Stuck in Limbo

The bankruptcy bill (S. 420/H.R. 333) remains in a legislative cul-de-sac, awaiting resolution of the makeup of Senate conferees. Though Majority Leader Trent Lott (R-Miss.) announced he was near a deal with Minority Leader Tom Daschle (D-S.D.), no agreement has been finalized. While some compromise will have to be reached for the Senate to do its work on other bills in the 107th Congress (e.g., campaign finance reform, education reform, government spending bills), no other bills are currently in the same position, thus reducing the imperative for a quick deal. As Senate committees report measures, however, there may be other legislative vehicles for the bankruptcy bill. Lead sponsor Charles Grassley (R-Iowa) chairs the Finance Committee, and thus may have the ability to attach the bill to a must-pass tax measure. While Congress is stalled on procedural matters, critics continue to focus on the substance of the bill. The Consumer Federation of America announced the results of a public opinion poll, taken March 22-25, of more than 1,000 adults. The results showed that 49 percent opposed a bill "which makes it more difficult for individuals and families to declare bankruptcy," while only 28 percent favored such a bill (23 percent didn't know or had no opinion).

Meanwhile, first-quarter bankruptcy filings are expected to rise by at least 15 percent over the same period a year ago.

 

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