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The National Bankruptcy Review Commission

When I first became a member of the House of Representatives in 1973, I was assigned to the Judiciary Committee. At about the same time, the Committee received an extensive report on revision of the national bankruptcy law, the product of a commission which had been appointed five years earlier. From that time forward, one of my main interests in the Congress was revision of the bankruptcy law. I was one of the co-sponsors of the Bankruptcy Reform Act, which was enacted on November 6, 1978, the first major revision of the bankruptcy law since 1938. It was long overdue. Fundamental changes were made, including a new Bankruptcy Code with a bankruptcy court of broadly expanded powers. It has served the country well and has been a major stabilizing influence on our nation's economy since its enactment.

Congress has not been shy about amending the law over the intervening years, and the reported decisions of the courts interpreting the legislation have been voluminous and frequently in disagreement with one another. Many of the problems now confronting the courts were simply not anticipated twenty years ago--for example, the mass tort claim; and, of course, bankruptcy filings are now at an all time high.

The time had come for another review when Congress created the nine-member National Bankruptcy Review Commission in 1994. It was a hard-working Commission with a dedicated and talented staff. During our two-year term we had more than 21 public meetings in all parts of the country, attended by more than 2600 interested persons. We received approximately 2500 separate communications. On October 20, 1997, we filed our Report with Congress, on time and within budget. The Report is over 1300 pages long, including 172 separate recommendations.

One thing was quite apparent to the Commission: Most everyone familiar and directly involved with the bankruptcy system believes that drastic reform is neither necessary nor desirable. The overwhelming weight of the evidence presented to the National Bankruptcy Review Commission indicated that the general structure of the system should not be dismantled, as was done twenty years ago. This conclusion should come as no surprise. When Congress established the Commission, it had indicated its general satisfaction with the functioning of the system and that it anticipated only modest adjustments to ensure balance and fairness and to keep costs to a minimum.

Accordingly, the Commission's recommendations are not as global as some might have anticipated. Nevertheless, there are a number of significant proposals. The 172 recommendations themselves are grouped topically and include extensive discussion. For example, a modest recommendation to limit dischargeability of credit card debt appears in the chapter concerned with Consumer Bankruptcy and its section on Dischargeability. The suggested statutory change itself is accompanied by sixteen pages of text, including an explanation of existing law concerning credit card debt, some of the problems associated with it, and some of the changes suggested to the Commission. Not every recommendation of the Commission was unanimous. In order to preserve balance in the Report, most of the texts accompanying recommendations include a portion entitled "Competing Considerations." In addition, many Commissioners freely exercised their right to file dissenting views with the Report.

The Commission has completed its work and gone out of existence. Now it is up to Congress, which, as all know well, can be very deliberate. Unlike the report of twenty-five years ago, this Report does not require an "all or nothing" response. Many of its recommendations can be addressed individually. I anticipate quick movement on some of the higher profile recommendations, with the major part deferred until Congressional staff have had an opportunity to review them in some detail.

Regardless of the disposition of our recommendations, the Commission has provided Congress with a careful analysis of a significant number of problem areas within the Bankruptcy Code requiring its consideration, even if the responses to the problems are not the ones recommended by the Commission.

You may want to know more about the content of the Report. A printed copy is available for your review and copying in the Law Library of the Roanoke Bar Association located in the Roanoke City Court House Building. There is also universal access to the entire Report on the web site of the Government Printing Office at www.access.gpo. gov. In addition, a capsule summary of each of the 172 recommendations (forty-five pages in length) is available by calling our law library at 540-983-7531 or visiting our firm web site at Further, my notes and the volume of materials provided to me by the Commission have been donated to the Archives of the Law Library of Washington & Lee University, where my files incident to work on the Bankruptcy Reform Act of 1978 are also housed.

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