CLLA Leads the Way on Federal Bankruptcy Legislation

Continuing its role as a leader in shaping commercial law and bankruptcy policy in the U.S., the Commercial Law League of America’s Bankruptcy Section has been actively engaged in efforts to modify mortgages rules aimed at helping debtors facing foreclosure.

The CLLA is largely creditors’ rights-based organization, but, in light of the current economic crisis’ severity and the importance of homeownership to the broader economy, calls for strong action on mortgage reform.

The Bankruptcy Section's legislative committee wrote letters supporting Congress' removal of Bankruptcy Section 1322(b)(2)'s prohibition of modifications of mortgage's secured by the debtor's principal residence. The bankruptcy provisions were included in the original bailout bill ultimately defeated by the House of Representatives on September 29.

Later, in October, the Bankruptcy Section continued to address the mortgage crisis and its growing impact on credit markets. The Section's Legislative Committee leaders, Peter Califano and Louis Robin, drafted a letter to Senator Dodd once again providing support for the elimination of the prohibition of mortgage modification contained in Bankruptcy Code Sections 1322(b)(2) and 1123(b)(5) for residential mortgages.

The Section's efforts have been cited in the Dec. 23, 2008 issue of "Bankruptcy Court Decisions." The Section will also share their efforts with national and local circulations.

The Commercial Law League of America (www.clla.org) is a 112-year-old national organization of attorneys, collection agencies and other experts in credit and finance actively engaged in the fields of debt collection, commercial law, bankruptcy and reorganization. While an advocate for creditor interests, CLLA is also an advocate for the fair, equitable and efficient administration of collection, commercial and bankruptcy cases for all parties-in-interest.