NEW YORK, NY - As anticipated, Senator Charles Grassley(R-Iowa) introduced comprehensive bankruptcy reform legislation, revised for the 2005 legislative session, last week with several co-sponsors including a democratic senator. The bill's language is substantially similar to last year's HR975, but fails to include Senator Charles Schumer's (D-New York) controversial language regarding dischargeability of debts in connection with debts arising as a result of judgments for damages incurred in connection with abortion clinics, their patients, and doctors.

While it is likely that the bankruptcy reform legislation will see greater support this year due to the greater majority of Republicans in both the House and the Senate, and due to its overwhelming popularity with lenders and Credit Unions, its passage, in its current form, remains questionable.

Any party expecting to come into contact with bankruptcy issues in 2005 should continue to carefully watch legislative developments in this area. Comprehensive federal bankruptcy reform, promised for at least the past five Congressional sessions, should very much remain on the legislative radar screen throughout 2005.

Michael L. Moskowitz and Richard E. Weltman are members of Weltman & Moskowitz, LLP, having offices for the practice of law in New York and New Jersey. The firm handles cases involving bankruptcy and creditor's rights, business litigation, technology law, real estate, and other dispute resolution and transactional matters. They can be reached at 212.684.7800 or 201.794.7500 or by e-mail.