Bankruptcy Law is Federal legislation. That means that whoever wins the white house on November 4 may ultimately control the interpretation of the current or future bankruptcy laws.
This can happen in two ways. First, if Congress passes legislation to change the current bankruptcy law, the president will have the right to veto or approve those changes.
Secondly, the interpretation of bankruptcy law ultimately lies with the Supreme Court. The next president is likely to get a chance to nominate at least one, if not two, Associate Justices. Since decisions of the court often come down to a five to four vote, those appointments may end up being determinative of how the law is interpreted.
There are all kinds of areas where the Supreme Court will ultimately decide bankruptcy law. The current Code, which went into effect in October 2005, has been tested many times in numerous courts around the country, often with different results. Although none of those cases has been heard by the Supreme Court yet; the court will, no doubt, get an opportunity in the near future to resolve those controversies.
And, if the law is changed by Congress, as many pro-consumer groups are urging, those changes too will be challenged and ultimately resolved by the nine Justices of the Supreme Court.
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Last modified: November 2, 2008