“Cram-Down” Power For Bankruptcy Judges Likely To Die In Senate
April 30, 2009
A Wall Street Journal story by Elizabeth Williamson said that President Barack Obama’s plan to give bankruptcy judges the power to modify mortgages is headed for a defeat in the U.S. Senate.
The measure, once an amendment offered by Senator Dick Durbin of Illinois as part of a sweeping housing bill to be considered today, is expected to be voted on separately and will lack the 60 votes to necessary to pass a procedural vote, according to Williamson’s article.
Seen by the President and many Democrats as an important releif for homeowners, bankruptcy protection will still provide judges with the power to modify the terms on other debt.
Chapter 13 bankruptcy protections will still offer homeowners with a way to stop foreclosure, but will require more intense negotiations to modify the terms of the mortgage.
**Updated. The measure faile in the Senate with only 45 votes for and 51 against.
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