bankruptcy beat
Congress has been trying to overhaul the bankruptcy code for the last several years. The overhaul is aimed at cracking down on perceived abuses, and generally, making the front doors to bankruptcy a little narrower to encourage people to, oh, just pay up instead. Over the years, this effort has been stymied by various local issues, and even the abortion debate, but is seems like passage is likely this year (we say that every year). Regardless of when it happens, it will be too late.
My experience in the bankruptcy world has taught me that bankruptcy is one of the most efficient areas of the law. The courts, the trustees, and most of all the bankruptcy lawyers tend to be a fairly quick-thinking and adaptive lot. The result is that, more than any other area of litigation, certainly, litigation in federal courts, the bankruptcy system moves quickly to address the changing needs of debtors and creditors who are trying to do neat things like live and run businesses.
Since Congress starting its overhaul process, the reaction of the bankruptcy courts and the US trustees has been swift and fairly efficient. Their message: Congress does not need to fix this, we can fix it ourselves. So there has been a crackdown on debtors in bankruptcy, and from my humble perspective, I think the cleanup has worked.
Over at Automatic Stay, Debra Innocenti follows trends in bankruptcy, and took note yesterday of the continuing crackdown. Link.
