Bankruptcy Loophole
Some of the most notorious defendants in securities fraud cases have been able to shelter income from creditors by filing for bankruptcy under the same terms as corporations. But Sen. Charles E. Grassley (R-Iowa), backed by the Securities and Exchange Commission, is seeking to close the loophole in the bankruptcy laws.
Grassley is proposing an amendment to bankruptcy legislation that would tighten payment requirements for individuals who file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The Senate Judiciary Committee planned an amendment drafting session today.
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