Tuesday, October 14, 2008

What Must I Know about the NEW Nat'l Guard & Reservists Debt Relief Act of 2008? (Passed by Congress, & Presented to the President on Oct. 9, 2008)



Please note that this writer is not licensed to practice law in Oregon. This means that he is not legally permitted to give any legal advice or perform any legal services. This Bulletin and the entire contents of this website is written only for attorneys. and is not intended for the public. If any non-attorney is reading this, you must consult an attorney about ANYTHING you read here. Nothing in this website is intended to be nor should be read as being legal advice to anyone.


By Andrew Toth-Fejel, Bankruptcy Litigation Support for Attorneys, Andy@BLSforAttorneys.com



The National Guard and Reservists Debt Relief Act of 2008 passed the U.S. Senate by Unanimous Consent on September 30, 2008, and the House passed it with a roll call vote on October 3. The bill was presented on October 9 to the President to sign into law. Here is the Act as passed by Congress. I was not able to find any statements whether or not the President intends to sign it, but given the overwhelming Congressional support and the politically sensitive population assisted, I presume he will . The law primarily changes one subsection of the Bankruptcy Code, so it is easy to become familiar with it before its effective date.

The Population of Debtors Affected
The Act exempts a very specific population of debtors from the Section 707(b)(2)(A) means test, not allowing the dismissal or conversion of a case on that grounds of not meeting that test.

The debtors affected include those members of the National Guard and the Armed Forces Reserves who, after September 11, 2001:

1) at the time of filing their bankruptcy case either are in the midst of a period of at least 90 days of active duty, or had been in such a period of active duty during the last 540 days (about 18 months) before filing the case; or
2) at the time of filing their bankruptcy case are performing "a homeland defense activity" lasting at least 90 days, or had been in such a period during the last 540 days before filing the case.


GAO Study
Within two years after the effective date of the Act, the General Accountability Office must present to Congress "a study of the use and the effects of the provisions of law amended." The Congressional Research Service's summarizes the bounds of this study:
Directs the Comptroller General [the head of the GAO] to study and report to Congress on whether and to what degree members of reserve components of the Armed Forces and the National Guard: (1) avail themselves of the benefits of this Act; (2) are debtors in federal bankruptcy cases substantially related to service that qualifies such members for such benefits of this Act; and (3) are debtors in federal bankruptcy cases materially related to such service.
Requires such study to include the effects that the use by such members of this Act has upon: (1) the bankruptcy system; (2) creditors; and (3) the debt-incurrence practices of such members.
Effective Date of the Act
The Act will be effective 60 days after its date of enactment.

Temporary Nature of the Act
The Act will only be in effect for three years, for cases filed during the three-year period starting on the effective date of the Act.




by: Andrew Toth-Fejel
Bankruptcy Litigation Support for Attorneys
Andy@BLSforAttorneys.com

Please note that this writer is not licensed to practice law in Oregon. This means that he is not legally permitted to give any legal advice or provide and legal services. This Bulletin and the entire contents of this website is written only for attorneys. and is not intended for the public. If any non-attorney is reading this, you must consult an attorney about ANYTHING you read here. Nothing in this website is intended to be nor should be read as being legal advice to anyone.

© 2008 Bankruptcy Litigation Support for Attorneys