S. 256, the Bankruptcy reform legislation was passed by the Senate on March 10, 2005, and on April 14, 2005 it was passed by the House of Representatives on a vote of 302 in favor and 126 against. The bill was signed into law on April 20, 2005 by President Bush. The newly enacted law became fully effective on October 17, 2005. Therefore, all bankruptcy cases filed on or after this date will be administered under the newly enacted law and any filed before this date will be administered based on the laws as they existed prior to October 17, 2005.

     With the November 2004 elections now history and President Bush reelected, another bankruptcy reform bill was introduced by Senator Grassley of Iowa (S.256).  The bill was hotly debated by the full Senate and although numerous amendments were introduced with only a very few were passing, S.256 was passed by the full Senate on March 10, 2005 on a vote of 74 in favor, 25 opposed and 1 not voting.

• Back to frequently asked questions page

After being passed by the Senate, S.256 was sent to the House of Representatives for further action.  The bill was forwarded to the House Judiciary Committee, chaired by F. James Sensenbrenner, R. Wisconsin.  Although there were attempts to amend the bill, it passed out of the Judiciary Committee with no amendments and was forwarded to the full House for debate and vote.  On April 14, 2005, the House of Representatives took up S.256, debated it for about 1 hour and with no amendments attached, passed on a vote of 302 in favor and 126 against.  

  As I noted in previous messages regarding this matter, President Bush signed S.256 into law on April 20, 2005 and as of October 17, 2005 it has taken effect. 

     This new law may change how debtors will be able to deal with their debt problems. Some may be able to file a Chapter 7 case, others may be required to file a Chapter 13 case.  I will continue to provide information to the public on how this law affects the ability to get financial relief as well as their ability to file for bankruptcy protection.

     Please refer back to this site on a regular basis as I will be updating the information as this law progresses through 2006 and beyond.  Please click here to see how this law affects debtor’s ability to file cases under the  New Bankruptcy Law.