Major Revisions to Bankruptcy Code

Major Revisions to the Bankruptcy Code (Title 11, United States Code, et seq) are on their way. Actually these were revisions that would have gone through several years ago were it not for the Clinton scandals, Democrat-inserted poison pills, 9-11 and the wave of Enron type bankruptcies. Predictably there was much local hand-wringing about the expected effect of the legislation. The biggest impact of the legislation will be the tremendous increase in the complexity and paperwork for what currently are routine bankruptcies. Attorney arent necessarily averse to doing more paperwork, but they certainly will not like having to vouch for their clients paperwork to an extent the code and rules did not ask of them before, including requiring attorneys to attest that their debtor-clients will be able to make payments on reaffirmed debts. A good draft of the bankruptcy revisions incorporated into the current code is at the Davis Polk and Wardwell law firm website (caution this pdf document is over 300 pages!). Even though Bankruptcy reform is certain to pass, no one can say for sure how much of the bill the Trustees and creditors will seek to enforce.