Legal Question in Bankruptcy in Pennsylvania

Re: What and when

Short answer -- There is currently two different bills that have been passed; one by the Congress and one by the Senate but they probably will never become law.

The major proponents of "bankruptcy reform" were for the most part the consumer credit card institutions like Visa, MasterCard, and American Express. The pumped a vast amount of money to congress, senate and paid lobbyists, and the result was the two pending bankruptcy bills which we have currently. By the way, approximately a hundred federal bankruptcy judges sent a detailed letter to both the Congress and the Senate urging that this legislation not be passed. The two versions vary slightly but in essence they make it extremely difficult for most people to file for complete relief under Chapter 7. Essentially, unless a person or family qualifies as below the poverty line, the bankruptcy filer would be mandated to file a reorganization case under Chapter 13 and pay at least 25% of most debts.

REMEMBER THIS IS NOT THE LAW CURRENTLY BUT THE PROPOSED LAW to take effect. Luckily, the two versions of the "new and improved bankruptcy" had to be resolved so that one bill could be presented to President Bush for his signature. In addition, President Bush has said that as the proposed laws are drafted he would be forced to veto. This has to do with the issue of the amount of home equity a bankruptcy filer can protect in Texas versus the smaller limits established by other states.

I reside in Minnesota and I am thankful for the efforts of my Senator Paul Wellstone who recently was quoted on the issue of whether or not to begin committee discussions to consolidate the two versions of the bill. His position is that at a time when President Bush is convincing Americans to keep spending in an effort to jumpstart the economy it is asinine to punish consumers by limiting the availability of bankruptcy relief. This recession has caused enormous downsizing as many companies are paying the price for poor business decisions and many are availing themselves of bankruptcy relief. It would be terribly unfair to limit the ability of working Americans who have lost their jobs or suffered similar economic hardship because of the blunders of these corporations.