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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

New Bankruptcy Legislation: A Rocky Road

Posted on Tuesday (December 30, 2003) at 12:23 pm to Bankruptcy Legislation
Nassau Lawyer

Bush’s Election Appears to Make Overhaul Certain. In 2001, the reform legislation gathered a great deal of momentum in Congress and it appeared inevitable that new bankruptcy legislation would be enacted by the end of that year. With President Clinton no longer in office, a shift in the administration made it more likely that the bankruptcy laws would be overhauled, especially considering that President George W. Bush announced that he would immediately sign any new bankruptcy reform legislation that was placed on his desk. Interestingly, M.B.N.A., the nation’s largest credit card bank, was also the largest contributor to the Bush presidential election.

In the Spring of 2001, the legislation swiftly moved through Congress and the House overwhelming approved the reform bill. It appeared that the bill would become the first major piece of legislation to be signed by President Bush. The bill then got saddled in the Senate when maverick Vermont Republican Senator Jim Jeffords switched parties, effectively destroying the Republican Senate majority. This had the effect of delaying any forward movement of the bill in the Senate, especially considering that Jeffords’ jump shifted leadership of the Judiciary Committee overseeing the bankruptcy bill from a Republican to a Democrat. However, before the Senate even had an opportunity to fully address the bill, the World Trade Center fell and the Pentagon was hit.

In the wake of the terrorist attacks of September 11, 2001, bankruptcy reform legislation slipped from the Congressional agenda and again reached another stalemate. Around the time of the attacks, a formal meeting of House and Senate conferees had been scheduled, but the House Judiciary Chairman postponed the conferences indefinitely as a number of other key members who sit on the Bankruptcy Conference Committee became immersed in new critical national defense matters related to the attacks. These new Congressional priorities seemed slated to occupy Congress for some time. In addition, some committee members acknowledged that the economy was sputtering and potentially headed for a recession even before the attacks, which contributed to the decision at that time to place reform legislation on the back burner.

In 2002, Congress again appeared to come close to approving new legislation. However, our own New York Senator, Charles Schumer, sponsored an amendment aimed at stopping abortion opponents from evading subsequent fines by declaring bankruptcy. Suddenly, the entire debate on bankruptcy reform became consumed by abortion rights arguments. Perhaps Schumer did not want the proposed bankruptcy bill to become law and very cleverly threw a wrench into the cogs. The Schumer amendment caused an unusual and unlikely scenario in which mostly Republican pro-life members of the house joined forces with mostly-Democratic opponents of the bankruptcy reform bill. Together, this group was effective in bringing about a surprising defeat to the bill on the last day of an abbreviated lame-duck session closing out the 2002 Congress.

Enactment Still Possible This Year. In 2003, with Republicans again taking control of the Senate, it appeared even more likely that a new bill would emerge quickly. The Spring of 2003 saw the introduction of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, which was essentially the same bankruptcy reform bill that the Senate passed last year, although it lacked the discharge exception for certain obligations imposed on abortion clinic protestors. The bill was quickly passed by the House. This was the seventh time in recent years that the House passed an omnibus bankruptcy reform measure. Fortunately, the Senate version of the bill has met a very uncertain future to date. However, Congress is still in session and it is still possible that the Senate can pass the bill, in which case it could quickly go through committee and then be presented to President Bush for signature. Some Senators have announced their determination to focus on the bill before the end of this year’s session. As of November 25, 2003, the House filed the 2004 omnibus appropriations bill, apparently without the bankruptcy reform act. If Congress adjourns for the end of the year without enacting the new legislation, informed sources expect to see the reform bill come back immediately in 2004.

Advising Your Client About Possible Change in the Law. Bankruptcy attorneys should recommend to their clients that they quickly take advantage of the existing laws and play it safe, rather than chance difficulty with newer laws. Although an overhaul of the Bankruptcy Code should certainly have a phase-in period of several months before becoming effective, there have been times in the past when significant changes were made to the bankruptcy laws with very little advance notice. The prudent client seeking bankruptcy relief should not wait too long. I have all my clients sign a notice advising them that the laws may change.

About the Author. Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a frequent columnist for the Nassau Lawyer, the official publication of the Nassau County Bar Association in New York. This article appeared in the December 2003 issue of the Nassau Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Medford, Commack, Woodbury and Valley Stream. (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.

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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »


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Craig D. Robins, Esq.
35 Pinelawn Road, Suite 218E, Melville, NY 11747.

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