Consumer Proposals in the Bankruptcy Reform Act of 1998: H.R. 3150, 105th Congress, 2d Session (1998)

Publication Date: June 1998

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

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Abstract:

The House Judiciary Committee reported the Bankruptcy Reform Act of 1998, H.R. 3150, 105th Cong., 2nd Sess. (1998) favorably with an amendment in the nature of a substitute on May 18, 1998 by a vote of 18 to 10.

H.R. 3150 would require certain debtors to pledge future wages or income towards debt repayment under a chapter 13 consumer reorganization rather than having the option of liquidating under chapter 7. Hence, it introduces the concept of “mandatory reorganization” into a bankruptcy system that has been premised on voluntary debtor reorganization as an alternative to liquidation to obtain a bankruptcy discharge of indebtedness.

This report considers the legislative history of the current consumer scheme. It examines current consumer bankruptcy practice and surveys the consumer proposals set forth in Title I of H.R. 3150, with an emphasis on the likely impact of the bill on family support obligations.

The report will be updated as legislative action warrants.