Bare, Clive W., Esq., on behalf of the National Bankruptcy Conference... Cleland, Richard, Special Assistant Attorney General, State of Iowa, on behalf Ballam, Deborah A., Kelly v. Robinson: An Erosion of the Fresh Start Concept for Debtors in Bankruptcy, 32 ST. LOUIS U.L.J. 103 (1987). Farmer, Susan Beth, Business Regulation Counsel, National Association of Attorneys General, Memorandum dated November 25, 1986, with attached Hennigan, John P., Jr., Professor, St. John's University School of Law, letter dated September 22, 1987, to M. Elaine Mielke, General Counsel, House Judiciary Committee, with article Criminal Restitution and Bankruptcy Law in the Federal System, 19 CONN. L.REV. 89 (1986)............. Kelly v. Robinson, slip opinion, 479 U.S. 36 (1986).. McCafferty, James, Esq., McCafferty & Gilmore, letter dated August 5, 1987, to Hon. Peter W. Rodino, Jr., with article written with Gary M. Bubis, Criminal Restitution and the Bankruptcy Discharge: Should We Reopen Debtors' Prison? 10 CRIM. JUST. J. 27 (1987). Rowland, Hon. John G., a Representative from the State of Connecticut, BANKRUPTCY DISCHARGE OF OBLIGATIONS TO GOVERNMENTAL UNITS THURSDAY, SEPTEMBER 8, 1988 U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MONOPOLIES AND COMMERCIAL LAW, COMMITTEE ON THE JUDICIARY, Washington, DC. The subcommittee met pursuant to call at 10:15 a.m. in room 2141, Rayburn House Office Building, Hon. Peter W. Rodino, Jr. (chairman) presiding. Present: Representatives Rodino, Edwards, Hughes, Fish, Moorhead, and Sensenbrenner. Staff present: M. Elaine Mielke, general counsel; Judith Bailey and Gary Goldberger, counsel; Alan F. Coffey, Jr., and Peter Levinson, associate counsel; Deloris Cole and Christine Abdallah, clerks. Chairman RODINO. We will proceed with a hearing on H.R. 2619, legislation intended to except from discharge in bankruptcy certain State-imposed orders to pay restitution and other obligations to governmental units. Under American bankruptcy law, the general rule is that a debtor is discharged of all debts once the debtor emerges from the bankruptcy process. The overriding philosophy behind discharge is to give the debtor a fresh start to begin anew to make a positive contribution to the economy of the community. Over the past two centuries, however, a limited number of exceptions to discharge have been added to the bankruptcy laws. Congress has determined that sound policy requires that certain debts should survive bankruptcy even though it may hamper the debtor's fresh start. These exceptions to discharge are set forth in Section 523 of the Bankruptcy Code and include, to name a few, debts for payments of child support, debts for willful and malicious injury to person and property, and debts for money or property obtained by fraud, larceny or embezzlement. Recently, State law enforcement officials have urged the addition of another exception to discharge for State-imposed restitution obligations, particularly those for consumer fraud, criminal violations and environmental cleanup. These officials contend that "criminals, crooks and polluters" are exploiting perceived loopholes in the Bankruptcy Code to thwart State restitution schemes. In reviewing this legislation, the subcommittee must consider several questions. Among them: Are current provisions in the Bankruptcy Code adequate to prevent abuse by dishonest debtors? If not, should Federal or State law determine what debts should be I 100TH CONGRESS 18T SESSION H. R. 2619 To amend title 11 of the United States Code to make nondischargeable any debt arising from a judgment or consent decree requiring an individual debtor to make restitution as a result of a violation of State law. IN THE HOUSE OF REPRESENTATIVES JUNE 4, 1987 Mr. ROWLAND of Connecticut introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend title 11 of the United States Code to make nondischargeable any debt arising from a judgment or consent decree requiring an individual debtor to make restitution as a result of a violation of State law. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Bankruptcy Antifraud 4 Act of 1987". NONDISCHARGEABILITY OF CERTAIN DEBTS FOR 5 6 RESTITUTION 7 SEC. 2. Section 523(a) of title 11, United States Code, 8 is amended |