H.R. 2415: Bankruptcy Reform in the Closing Days of the 106th Congress

Publication Date: January 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

Type:

Abstract:

A final effort to enact bankruptcy reform legislation took place as the 106th Congress came to a close. On Oct. 12, 2000, the House passed a conference report which embodied the legislation negotiated between House and Senate Republican leadership. It was passed by the Senate as well on December 7, 2000 by a vote of 70 to 28.

The legislation retained the essential elements of consumer reform that previously passed both chambers, i.e., a complicated means test to exclude some debtors from chapter 7 and stricter performance requirements for chapter 13 debtors. Among the more controversial provisions, the Senate-passed provision making liability for violence against abortion facilities nondischargeable was omitted. With respect to the homestead provision, a modified version of the House approach was adopted. This means that homestead exemptions would continue to vary from state to state, but debtors would be discouraged from making pre-bankruptcy domiciliary homestead adjustments.

Because the bill retained features that the White House objected to, President Clinton pocket-vetoed it. The legislation is likely to be taken up again in the 107th Congress.