The Mueller hearings dominated the headlines on Capitol Hill this week. But action was still happening on the House floor with a Virginia congressman’s reform of chapter 11 bankruptcy.
In the game of Monopoly, a player who cannot pay what they owe is bankrupt. Game over. You lose. But in real life, those people are still in the game. And many small businesses feel the system is rigged against them, with rules designed for major corporations with deep pockets.
That’s why Republican Congressman Ben Cline of western Virginia worked with Democrats on small-business bankruptcy reorganization. Here’s Cline on the House floor this week.
“Small business owners are the backbone of communities across our country. It’s their risk taking that drives the creation of new jobs in America," Cline said. "When they need the bankruptcy code’s help to reorganize their debts and keep their businesses going, the bankruptcy code should be there as a tool to help them.”
Any business with a debt of $2.7 million or less would be eligible for new streamlined rules, ones designed to simplify the process of submitting all that paperwork.
“A lot of the documents you’re providing — the plan of reorganization and disclosure statement — is very time consuming," says John Bollinger, a bankruptcy attorney who practices in Tidewater. "And there’s a lot of negotiating and creditors have a lot of power.”
And so, taking some of that power away is an aim of the bill, which creates new limitations on how creditors can object to plans. The bill passed the House this week, and now heads over to the Senate with bipartisan support.