Hurricane Katrina and New Bankruptcy Law:

Someone might want to make sure the New York Times Editorial Board gets a copy of this as it seemed to be unaware of the actual provisions of the bankruptcy reform legislation in its Editorial the other day:

News Advisory For immediate release Contact: Jeff Lungren/Terry Shawn October 5, 2005 202-225-2492

Justice Department Will Utilize Flexibility in New Bankruptcy Law to Assist Hurricane Katrina Victims

Letter to Chairman Sensenbrenner Describes 7 Steps Department is Taking

WASHINGTON, D.C. - The Justice Department today in a letter to House Judiciary Committee Chairman F. James Sensenbrenner, Jr. (R-Wis.) states it will utilize the flexibility in the new bankruptcy reform law to assist the victims of Hurricane Katrina and other natural disasters. The letter, in response to a September 27, 2005 letter from Chairman Sensenbrenner, describes the 7 steps the Justice Department's U.S. Trustee Program is taking to ensure that appropriate discretion under the new law is exercised in a way most favorable to victims of natural disasters.

Chairman Sensenbrenner stated, "I commend the Justice Department for utilizing the new law's flexibility to assist the victims of Hurricane Katrina. The new law anticipated disasters such as Hurricane Katrina; as a result, Congress crafted this bipartisan law to provide compassion and flexibility to those affected. The appropriate steps announced today demonstrate this key aspect of the new law will be implemented as intended. In addition, I look forward to seeing the new law in effect nationwide so those abusing the current bankruptcy system to shirk their child support obligations and other responsibilities will no longer be successful."

The Justice Department's letter to Chairman Sensenbrenner is available at

Chairman Sensenbrenner's September 27, 2005 letter to the Justice Department is available at

Dilan Esper (mail) (www):
OK, so we are supposed to be convinced that Katrina victims will get their discharges because a Congressman puts out a press release?!? And a dishonest one at that-- Sensenbrenner knows full well (as does Zywicki, who quotes him) that this bill was not about people not paying their child support obligations, it was about people not paying their credit card bills.

Seriously, I haven't seen one good argument why Katrina victims shouldn't be exempted in toto from the new bankruptcy bill. If these seven steps taken by the Justice Department really accomplished that, then neither Zywicki nor Sensenbrenner could have any opposition to Congress simply codifying that so as to ensure that the Administration keeps its promise.

What is more likely is that the sponsors of this bill are desperate to hold off a new, democratic debate in the Congress over the provisions of this bill. They took eight years to get it, and they can't abide by the possibility that elected representatives might decide to scale it back. So better do all you can to convince the public that there's nothing that needs to be amended.
10.5.2005 5:58pm
When can I expect my credit card rate to go down?
10.5.2005 7:10pm
Zywicki (mail):
The link is to a Deparment of Justice letter explaining how the law deals with the hurricane scenario. The press release is a summary of the letter.
10.5.2005 9:33pm
Eli Rabett (mail):
Hmm...did they CC the banks and other creditors. Color me not impressed.
10.5.2005 11:48pm
Ex Homeless Guy (mail) (www): is a disaster related portal I created after the Katrina hurricane (in hopes to help). Find links for information on natural disaster to terrorism or submit helpful crisis websites ;)
10.18.2005 4:17am