BANKRUPTCY REFORM BILL PREDICTED TO BE BACK EARLY THIS YEAR

January 10, 2005

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INFORMED SOURCES tell us that the consensus in Washington is that the bankruptcy reform legislation that has failed repeatedly in recent years to be enacted into law, will be re-introduced in Congress soon. If this bill is passed, it will be far more difficult and expensive for consumers to file bankruptcy. Many may not qualify, that do qualify under current law.

These sources tell us the bill is expected to move quickly through the House, barring other legislative issues taking priority, most likely before April.

Then the fight will shift to the Senate. With its rules, the majority cannot force issues as easily or as quickly – 50 votes are needed to break a filibuster. And, there is no indication that Sen. Schumer has given up on his “poison pill” provision that many Senators who support the bill find repugnant.

At the outset of the 109th Congress, sources give the bill a 60/40 chance of favor of it passing and becoming law (by being signed by the President).

If that does not happen by the end of the first session, 2005, and the bill carries over into 2006, then it becomes 50/50.

In this connection another source, Susan Jones with CNSNews.com reported that Sen. John Cornyn’s office said likely business in the weeks ahead, in addition to tsunami relief, includes class action reform and bankruptcy reform. But no Senate bills will be introduced before Monday, Jan. 24.