[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
         NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008 

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 4044

                               __________

                             APRIL 1, 2008

                               __________

                           Serial No. 110-175

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                LINDA T. SANCHEZ, California, Chairwoman

JOHN CONYERS, Jr., Michigan          CHRIS CANNON, Utah
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
ZOE LOFGREN, California              RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts   TOM FEENEY, Florida
MELVIN L. WATT, North Carolina       TRENT FRANKS, Arizona
STEVE COHEN, Tennessee

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


































                            C O N T E N T S

                              ----------                              

                             APRIL 1, 2008

                                                                   Page

                                THE BILL

H.R. 4044, the ``National Guard and Reservists Debt Relief Act of 
  2008''.........................................................     3

                           OPENING STATEMENT

The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................     1
The Honorable Trent Franks, a Representative in Congress from the 
  State of Arizona, and Member, Subcommittee on Commercial and 
  Administrative Law.............................................     6

                               WITNESSES

The Honorable Janice Schakowsky, a Representative in Congress 
  from the State of Illinois
  Oral Testimony.................................................     9
  Prepared Statement.............................................    14
The Honorable Dana Rohrabacher, a Representative in Congress from 
  the State of California
  Oral Testimony.................................................    17
  Prepared Statement.............................................    19
Mr. Raymond C. Kelley, National Legislative Director, AMVETS, 
  Lanham, MD
  Oral Testimony.................................................    31
  Prepared Statement.............................................    33
Mr. Jack F. Williams, Scholar-in-Residence, American Bankruptcy 
  Institute, Alexandria, VA
  Oral Testimony.................................................    38
  Prepared Statement.............................................    40
Mr. Edward C. Boltz, the Law Offices of John T. Orcutt, P.C., 
  Durham, NC, on behalf of the National Association of Consumer 
  Bankruptcy Attorneys
  Oral Testimony.................................................    49
  Prepared Statement.............................................    51

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Chris Cannon, a 
  Representative in Congress from the State of Utah, and Ranking 
  Member, Subcommittee on Commercial and Administrative Law......     7
Material submitted by the Honorable Janice Schakowsky, a 
  Representative in Congress from the State of Illinois..........    10
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, 
  Chairman, Committee on the Judiciary, and Member, Subcommittee 
  on Commercial and Administrative Law...........................    26

                                APPENDIX
               Material Submitted for the Hearing Record

Answers to Post-Hearing Questions from the Honorable Janice 
  Schakowsky, a Representative in Congress from the State of 
  Illinois.......................................................    64
Answers to Post-Hearing Questions from the Honorable Dana 
  Rohrabacher, a Representative in Congress from the State of 
  California.....................................................    66
Answers to Post-Hearing Questions from Raymond C. Kelley, 
  National Legislative Director, AMVETS, Lanham, MD..............    68
Answers to Post-Hearing Questions from Jack F. Williams, Scholar-
  in-Residence, American Bankruptcy Institute, Alexandria, VA....    71
Answers to Post-Hearing Questions from Edward C. Boltz, the Law 
  Offices of John T. Orcutt, P.C., Durham, NC, on behalf of the 
  National Association of Consumer Bankruptcy Attorneys..........   104


         NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008

                              ----------                              


                         TUESDAY, APRIL 1, 2008

              House of Representatives,    
                     Subcommittee on Commercial    
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:08 p.m., in 
rom 2141, Rayburn House Office Building, the Honorable Linda T. 
Sanchez (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Conyers, Sanchez, Delahunt, Watt, 
Keller, Feeney, and Franks.
    Staff present: Susan Jensen-Lachmann, Majority Counsel; 
Daniel Flores, Minority Counsel; and Adam Russell, Majority 
Professional Staff Member.
    Ms. Sanchez. This hearing of the Committee on the 
Judiciary, Subcommittee on Commercial and Administrative Law, 
will now come to order.
    Without objection, the Chair will be authorized to declare 
a recess of the hearing at any time.
    I will now recognize myself for a short statement.
    Since September 11, 2001, nearly half a million members of 
the National Guard and Reserve have been called to serve in 
Iraq and Afghanistan. As you might imagine, these lengthy and 
often unanticipated deployments not only disrupt the lives of 
these service members and their families, but can also lead to 
financial hardship. It is estimated, for example, that up to 26 
percent of National Guard members who are deployed experience 
money problems as a direct result of their deployment.
    You may also recall the very poignant testimony that we 
received at our hearing last May from a Chapter 13 debtor about 
her financial circumstances. She explained how after her 
husband, a member of the Army Reserve, was called to active 
duty and deployed to Iraq, the family income decreased by more 
than $1,000 per month, which, among other reasons, caused her 
and her husband to seek bankruptcy relief.
    One would think that our bankruptcy law would honor the 
special contributions of these brave men and women who make so 
many sacrifices to protect our Nation. Sadly, it does not.
    Exactly 3 years ago this very month, President Bush signed 
into law the Bankruptcy Abuse Prevention and Consumer 
Protection Act which contains some of the harshest changes in 
consumer bankruptcy law in more than 25 years. One of the more 
draconian changes is the so-called means test, which requires 
debtors to prove their inability to repay their debts through a 
complex bureaucratic maze at the risk of having their cases 
dismissed for being an abuse of the system.
    The means test is particularly unfair to National Guard and 
Reserve members both as a matter of principle and practice. 
Here is just one example: Service members, while serving in 
Iraq or Afghanistan, typically receive higher compensation in 
the form of combat pay, while they incur fewer living expenses. 
When they return to the United States, however, they receive 
less pay, and their expenses increase.
    The means test, nevertheless, requires a debtor to 
calculate his or her income based on the average monthly income 
that he or she received during the 6-month period preceding the 
filing date of the bankruptcy case rather than the debtor's 
current income. As a result of the means test, a service member 
could appear to have higher net income and, therefore, be at 
risk of having his or her case dismissed for abuse.
    To overcome this presumption, a service member must then 
demonstrate special circumstances which can oftentimes be a 
burden to undertake. This is not the way our consumer 
bankruptcy laws should work. Our service members deserve 
better.
    Today, we are examining a proposed legislative remedy for 
this issue. H.R. 4044 would amend the Bankruptcy Code and 
create a narrow exception for the means test for a National 
Guard or Reserve member if he or she is on active duty or 
performs a homeland defense activity after September 11, 2001, 
for at least 60 days and for the first 6 months after 
completion of such service.
    [The bill, H.R. 4044, follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Sanchez. Accordingly, I very much look forward to 
hearing from our witnesses. In particular, I commend my 
colleagues, Representative Schakowsky and Representative 
Rohrabacher, for their leadership on this issue.
    At this time, I would now like to recognize my colleague, 
Mr. Franks, for any opening remarks that he may have.
    Mr. Franks. Well, thank you, Madam Chair.
    And I want to welcome our witnesses. I especially would 
like to extend a warm welcome to our colleagues, Mr. 
Rohrabacher and Ms. Schakowsky.
    As the Committee is all too aware, the regular Ranking 
Member, Mr. Cannon, is not here at this moment--he may be here 
a little bit later--he could not be, and so I am going to do my 
best to try to reflect his perspective here, if I can.
    Madam Chair, the legislation that we are considering here 
today reflects what I believe is a bipartisan effort to do 
something which I think we all sympathize with. It is an effort 
to support our troops. Now the legislation seeks to help our 
Reservists and National Guardsmen affected by our wars in Iraq 
and Afghanistan.
    Reservists and Guardsmen pay a particular and very 
practical sacrifice when they are called to duty. Unlike most 
of our troops, they have to come off the civilian pay scale and 
adopt--or I should say adapt--to the lower military scale in 
most cases. There are reports that some of these patriotic men 
and women, especially those whose savings may be low when they 
report to duty in the first place, can be pushed over the 
financial brink when they take that pay cut. Strangely, they 
may have to consider bankruptcy in the wake of reporting for 
service.
    I think that is something we could all collectively say 
that we are very concerned with. H.R. 4044 responds by seeking 
to lift the means test in Chapter 7 bankruptcy, making it 
easier for hard-pressed Reservists and Guardsmen to wipe their 
debt slates clean and start over again. I applaud that concern, 
and I applaud the concern that has actually produced the 
proposal.
    But I want to sound a few notes of caution about the issues 
that I think we have to explore today and that may give us 
reason to ask whether we ought to propose some different 
responses. For example, I question whether or not we should 
make bankruptcy easier for these noble men and women instead of 
making it easier for them to stay out of bankruptcy in the 
first place.
    And I also want to highlight that service men who are 
teetering on the brink of bankruptcy may not lose just their 
personal assets. They may lose their security clearances 
according to the Department of Defense press release, and if we 
help them go into bankruptcy instead of helping them stay out 
of it, we may create an actual national security problem, 
increasing numbers of Reservists and Guardsmen serving in the 
war on terror without the security clearances they need to 
fight that war.
    When we consider relaxing the means test for these service 
men, we should also ask ourselves if, in so doing, we might 
also undermine other provisions of the laws affecting them, 
such as the Soldiers and Sailors Relief Act, which exists to 
protect service men.
    I raise these questions not necessarily in opposition to 
the bill, but to perform the vital role that only this 
Subcommittee can fulfill, and that is to make sure that before 
enacting legislation affecting the Bankruptcy Code that we are 
sure what we are doing is necessary, number one; number two, 
that it will not unduly undermine other important interests; 
and, finally, that it will work because bankruptcy, as we all 
know, Madam Chair, should always be a last resort, and I think 
that is true in the minds of the service men themselves as 
well.
    And finally, I raise a note of caution because the means 
test is at the heart of the consumer bankruptcy reforms we 
enacted in the Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2005. I think we should be especially 
vigilant of attempts to undo that. I think it is imperative 
that we ask today the kinds of questions I am proposing. Our 
country and our service men deserve no less than the most 
honest and diligent effort that we can deliver in this proposal 
or any other to make their lives better and to help them.
    Madam Chair, with that, I thank the witnesses, look forward 
to your testimony, and yield back my time.
    Ms. Sanchez. Thank you, Mr. Franks, and I appreciate you 
filling in for Mr. Cannon today.
    Without objection, other Members' opening statements will 
be included in the record.
    [The prepared statement of Mr. Cannon follows:]
 Prepared Statement of the Honorable Chris Cannon, a Representative in 
 Congress from the State of Utah, and Ranking Member, Subcommittee on 
                   Commercial and Administrative Law
    Thank you Madam Chair and welcome to our witnesses. I'd like to 
extend a particularly welcome to our colleagues, Mr. Rohrabacher and 
Ms. Schakowsky.
    The legislation we are considering today reflects a bipartisan 
effort to do something with which I think we all sympathize. That is, 
to support our troops.
    The legislation seeks to help our reservists and National Guardsmen 
affected by our wars in Iraq and Afghanistan. Reservists and guardsmen 
pay a particular and very practical sacrifice when they are called to 
duty. Unlike most of our troops, they have to come off of the civilian 
pay scale, and adapt to the often lower military pay scale.
    There are reports that some of these patriotic men and women--
particularly those whose savings may have been low when they report for 
duty--can be pushed over the financial brink when they take that pay 
cut. Strangely, they may have to consider bankruptcy in the wake of 
reporting for service.
    I suspect we all agree that is something we should be concerned 
with.
    H.R. 4044 responds by seeking to lift the means test in Chapter 7 
bankruptcy, making it easier for hard-pressed reservists and guardsmen 
to wipe their debt slates clean and start over again.
    I applaud the concern that produced this proposal. But I want to 
sound several notes of caution about issues that I think we must 
explore today, and that may give us reason to ask whether we ought to 
propose a different response.
    For example, I question whether we should be making bankruptcy 
easier for these fine men and women, instead of making it easier for 
them to stay out of bankruptcy.
    I also want to highlight that servicemen who are teetering on the 
brink of bankruptcy may not lose just their personal assets. They may 
lose their security clearances according to Department of Defense 
precedents. If we help them get into bankruptcy, instead of help them 
stay out of it, we may create a real national security problem--
increasing numbers of reservists and guardsmen serving in the War on 
Terror without the security clearances they need to fight that war.
    When we consider relaxing the means test for these servicemen, we 
also should ask ourselves if, in doing that, we might also undermine 
other provisions of the law affecting them, such as the Soldiers' and 
Sailors' Relief Act, which exist to protect servicemen.
    I raise these issues, not necessarily in opposition to the bill, 
but to perform the vital role that only this Subcommittee can fulfill. 
That is to make sure that before enacting legislation affecting the 
Bankruptcy Code, we are sure that what we are doing is necessary, will 
not unduly undermine other important interests, and will work.
    Because bankruptcy, as we all know, should always be a last resort.
    Finally, I raise a note of caution because the means test is at the 
heart of the consumer bankruptcy reforms we enacted in the Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2005.
    I think we should be especially vigilant of attempts to undo it. I 
think it is imperative that we ask today the kinds of questions I am 
posing. Our country and our servicemen deserve no less than the 
frankest, most fair assessment we can deliver of this proposal to help 
them.
    I yield back the remainder of my time.

    Ms. Sanchez. I am now pleased to introduce the witnesses 
for our first panel for today's hearing.
    Our first witness is Congresswoman Jan Schakowsky. She 
represents the Ninth Congressional District of Illinois. Ms. 
Schakowsky was first sworn in as a Member of the House of 
Representatives in 1998 and, since then, has continued her 
fight for economic and social justice, improved quality of life 
for all, and a national investment in health care, public 
education, and housing needs.
    Ms. Schakowsky serves on the Steering and Policy Committee, 
the House Select Committee on Intelligence, and the House 
Energy and Commerce Committee as Vice Chair of the Subcommittee 
on Commerce, Trade, and Consumer Protection. She is also a 
Member of both the Subcommittee on Health and the Subcommittee 
on Oversight and Investigations of the House Energy and 
Commerce Committee.
    Ms. Schakowsky is the sponsor of H.R. 4044.
    Our second witness is Congressman Dana Rohrabacher who 
represents the 46th District of California. Elected to Congress 
in 1988, Mr. Rohrabacher champions human rights and democracy. 
He serves as the Ranking Member of the Investigations and 
Oversight Subcommittee of the House Committee on International 
Relations and as a Member of the House Committee on Science.
    Mr. Rohrabacher is an original co-sponsor of H.R. 4044.
    I want to thank you both for your willingness to 
participate in today's hearing. Without objection, your written 
statements will be placed into the record, and we would ask 
that you limit your oral testimony to 5 minutes.
    You will note the lighting system. I am sure you are both 
familiar with it. When your time begins, you will get the green 
light. Four minutes in, you will receive a yellow light, 
letting you know that you have a minute to finish your 
testimony, and we will hit the red light when the time expires. 
We, of course, will allow you to finish any concluding thoughts 
before moving on to our next witness.
    After each witness has presented his or her testimony, 
Subcommittee Members will be permitted to ask questions subject 
to the 5-minute limit.
    With that, I would invite Ms. Schakowsky to please proceed 
with her testimony.

TESTIMONY OF THE HONORABLE JANICE SCHAKOWSKY, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you very much, Chairwoman Sanchez, 
Mr. Franks, and the rest of the Subcommittee. I appreciate so 
much your holding the hearing today for the members of the 
National Guard and Reserve who face bankruptcy when they return 
from service.
    Let me depart from my written statement and reply just 
briefly to Mr. Franks. You know, when Congress first passed in 
2005 the new Bankruptcy Act, Congress did have the wisdom to 
exempt disabled veterans from the means test, and so we see 
this as a very narrow addition to that at the Guard and Reserve 
as well.
    And I could not agree with you more that we should do all 
that we can to prevent the situation from these heroes having 
to face bankruptcy in the first place, but having said that, we 
know that some will, and so this is to address those, and we do 
not know how many, although we know, as the Chairwoman said, 
since 9/11, more than 460,000 Reservists and Guardsmen have 
been called to active duty in Iraq and Afghanistan, and a 
quarter of those more than once.
    These men and women have left their jobs and families to 
answer the call often with little or no notice. Service members 
who own and operate small businesses put their businesses on 
hold, sometimes sacrificing them altogether, while they serve 
their country. Many service members face unexpected extended 
tours of 15 months or longer, leaving them with almost no way 
to prepare financially.
    You mentioned, Mr. Franks, those who lose money when they 
go on active duty, but it also works the other way, too. The 
means test for veterans who file for bankruptcy has a 
particularly adverse income on some of them because, again, as 
the Chairwoman mentioned, combat pay of soldiers in Iraq or 
Afghanistan may be higher than their salaries at home, and they 
have fewer expenses when they are overseas so that when they 
return home, these individuals face lower incomes and higher 
expenses, and because the means test factors in a person's 
income and expenses for the 6 months preceding bankruptcy 
filing, sometimes a veteran's income is artificially inflated, 
and their expenses seem unduly low, and as a result, they risk 
failing the means test and facing Chapter 11 or Chapter 13.
    So our bill would simply allow the National Guard and 
Reservists to file for bankruptcy without the burden of the 
means test. We have 46 cosponsors, including 14 Republicans. It 
is a bipartisan piece of legislation, and it would only apply 
to the heroes who have served in the armed forces for more than 
60 days since September 11, 2001, and would exempt them from 
the test for up to 180 days after they return home.
    I would love to be able to tell you how widespread the 
problem is. The Veterans Administration reports that veterans 
have difficulties finding a job in the first 2 years after they 
return home, and that they are more likely to earn lower wages.
    Today's Washington Post ran a front-page article in their 
business section on how bleak the market is--18 percent of 
veterans recently back from tours of duty are unemployed, and 
of those who have been able to find work, 25 percent earn less 
than $22,000 a year. There are also currently 1,500 veterans of 
the wars in Iraq and Afghanistan who are homeless, and 
thousands of veterans return from the war with physical and 
mental injuries which make returning to work difficult or 
impossible.
    The Illinois Department of Veterans Affairs assists many 
veterans who face financial hardship, and I would like to ask 
unanimous consent, Madam Chairwoman, to insert statements into 
the record from caseworkers who, too often, assist veterans 
facing financial collapse, if I could put those into the 
record?
    Ms. Sanchez. Without objection, so ordered.
    [The information referred to follows:]
Material submitted by the Honorable Janice Schakowsky, a Representative 
                 in Congress from the State of Illinois

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Schakowsky. Our legislation would help returning 
service men like Jeremy W., a hero from my State, who was 
deployed from March 2006 to 2007, June of 2007. He is a member 
of the National Guard and, like many others, asked not to be 
identified because of the stigma surrounding financial 
problems.
    After he returned, he did not want to be away from his 
family. He decided not to return to his previous job as a truck 
driver, instead opting to take a lower-paid job. He now works 6 
days a week to pay his bills and is teetering on the brink of 
losing his house.
    The men and women who will risk their lives to protect us 
deserve protection in return. These selfless individuals should 
not face harsh bankruptcy procedures if they are in financial 
distress when they return home, even after we have tried to 
help them, and so when changes are made to the bankruptcy laws, 
they work for the disabled veterans, we hope that we will do 
the same for the Reservists and National Guard.
    Thank you.
    [The prepared statement of Ms. Schakowsky follows:]
      Prepared Statement of the Honorable Janice D. Schakowsky, a 
         Representative in Congress from the State of Illinois

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Sanchez. Thank you, Ms. Schakowsky. We appreciate your 
leadership on this issue and your taking the time to testify 
before the Subcommittee today.
    At this time, I would invite Mr. Rohrabacher to please 
begin his testimony.

 TESTIMONY OF THE HONORABLE DANA ROHRABACHER, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Rohrabacher. Thank you very much, Chairwoman Sanchez, 
Representative Franks, and other Members of the Subcommittee.
    We thank you for holding this hearing on H.R. 4044, a 
bipartisan bill that I originally introduced in the 109th 
Congress with the co-sponsorship of Representative Schakowsky, 
and it was reintroduced by Representative Schakowsky this year 
and myself as a co-sponsor.
    Let me note that this change was first proposed by 
Representative Schakowsky as a motion to recommit in the 
original bankruptcy reform bill. I was misinformed by the 
Republican leadership on the floor of the House at that time. I 
was told that this motion to recommit was redundant to changes 
that already existed in the law, and I was very upset when I 
found out that I had been misinformed and had voted the wrong 
way.
    At that time, I pledged myself to work with Representative 
Schakowsky to correct that situation, and that is what this 
bill is all about, correcting what should have been a no-
brainer to begin with, except that politics got in the way. 
This bill makes a very small and targeted change to the current 
bankruptcy law and places our National Guard and Reservists 
veterans under the bankruptcy law in place prior to 2005.
    Let me note at this time that I am a strong supporter of 
the Bankruptcy Reform Act that passed. Unfortunately, this 
should have been in that bill.
    As members of the National Guard and Reservists return from 
their tours of duty in Afghanistan and Iraq, they can face a 
new battle at home, which we have just heard. Quite often, 
these patriots will face financial hardship as they left better 
paying jobs to serve our country. For those members of the 
National Guard and the Reserves who deal with mounting bills 
during their time away and face bankruptcy upon their return, 
H.R. 4044 provides that these heroes will be treated under the 
prior system, which did not require them to repay all of their 
debts accumulated as a result of their service.
    This bill has been written to provide a small and targeted 
change to the bankruptcy law for a select group of people who 
deserve it the most. It is important to note that this bill 
will not apply to the entirety of the armed forces, as we just 
heard. The fact is many of those in the regular armed forces do 
not have the same problem. It is just for the members of the 
National Guard and Reserves who have been called on to disrupt 
their lives at home and to serve lengthy tours overseas.
    Prior to 9/11 and the Iraq war, these veterans could have 
been relatively assured that they would have a regular 
schedule; they would not face this disruption in their life for 
long periods of time. That has changed since 9/11, and now, 
quite often, we throw the Reserves and National Guard into 
economic and personal chaos as we call them up to defend their 
country.
    National Guard members and Reservists now have very little 
idea how long they must be away from home, and when they 
return, they may be called up again. So these veterans do not 
know exactly what their economic situation is going to be, and 
for this reason, they need to be treated in a special way. It 
is for this reason the National Guard and Reservists deserve 
this change.
    These heroes have made tremendous sacrifices for the sake 
of this Nation, and this bill will simply ensure that these 
heroes will not face bankruptcy and face a negative outcome for 
the fact of their service to the country. So I wholeheartedly 
support this amendment, and I certainly commend my fellow 
Representative for the hard work that she has put into this 
from the very beginning, since the day that we passed the 
bankruptcy bill when the Republicans were in the majority, when 
this should have been in that bill in the first place, and some 
of us who wanted to vote for it were misinformed as to whether 
or not this was actually being taken care of.
    So thank you very much, and I would ask my Republican and 
Democratic colleagues to support this reform.
    [The prepared statement of Mr. Rohrabacher follows:]
Prepared Statement of the Honorable Dana Rohrabacher, a Representative 
                in Congress from the State of California

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Sanchez. Thank you.
    I want to thank the first panel for their testimony. I know 
that Ms. Schakowsky has an Energy and Commerce Committee 
commitment, so if you need to be excused, you may leave at any 
time.
    I personally do not have any questions for the witnesses. 
Does any----
    Mr. Watt. Madam Chair?
    Could I just encourage both of my colleagues to look at the 
title to this bill, which I think is very misleading? Actually, 
the means test is the only thing that was worth having in the 
bankruptcy reform bill. So when you say exempt people from the 
means test, that is not what you are doing, and I do not think 
that is what the language of the bill actually does.
    It actually gives service people, regardless of their prior 
income, the benefit of having a means test. It does not exempt 
them from the means test because the means test itself is a 
positive thing. It is about the only thing that was positive in 
the bankruptcy reform bill when you get right down to it.
    So I think your bill is misnamed, is the point I am making, 
and I hope you all will take a look at that.
    Ms. Sanchez. Does the gentleman yield back his time?
    Mr. Rohrabacher. Thank you for that analysis. I appreciate 
that.
    Ms. Sanchez. Any other Members have questions?
    Mr. Franks is recognized for 5 minutes.
    Mr. Franks. Well, thank you, Madam Chair.
    I guess, Ms. Schakowsky, I will address it to you first, 
and then Mr. Rohrabacher can respond as well.
    Is there a possibility that the service men would be 
exempted already and qualify for relief under the circumstance 
already because we put a special circumstances provision in the 
legislation, and is that provision not applied or not adequate 
to the task that you are trying to accomplish here?
    Ms. Schakowsky. It is not adequate to the test, and, 
actually, that was the intention of this amendment, was to make 
sure that these individuals were covered, and that was the 
information that you were told, that they were covered, but 
they are not.
    Mr. Franks. And just for clarity, I mean, this is really 
the only issue you are trying to address here, not down the 
road that there would be an additional expansion of this? This 
is the only thing?
    Ms. Schakowsky. No. No. As Mr. Rohrabacher stated, this is 
a very narrow, targeted bill, something I had tried initially 
to have as part of the bankruptcy bill, just like the disabled 
veterans, and this is it.
    Mr. Franks. Mr. Rohrabacher, is there anything you want to 
add to that?
    Mr. Rohrabacher. There should be no doubt at all after this 
bill what the intent is, and from the people who I have spoken 
to, there is doubt as to the way it is now.
    Mr. Franks. Madam Chair, I just would applaud the attitudes 
and the motivations of both of the Members there. Obviously, 
they are trying to do something that they believe is important 
to the cause of helping our service men and women.
    So, with that, I yield back.
    Ms. Sanchez. The gentleman yields back the balance of his 
time.
    Any other Members seek to be recognized?
    Mr. Delahunt. Madam Chair?
    Ms. Sanchez. Mr. Delahunt is recognized for 5 minutes.
    Mr. Delahunt. I wonder if our colleagues would consider, 
rather than 6 months, a longer period of time. I think what we 
are discovering is when the men and women return from active 
duty, just the readjustment, if you will, to civilian life--in 
some cases, their ability to come back into the workplace is a 
difficult transition.
    In 6 months, to us, while we sit here in Washington and 
have discussions about what is happening in Iraq, Afghanistan, 
and elsewhere in the world, the reality, I think, that these 
men and women face is something entirely different. And I 
wonder how quickly that readjustment back into civilian life, 
what all of that entails, might require more than 6 months.
    I was just discussing with the former Ranking Member here, 
Mr. Watt, the possibility of a friendly amendment about a year 
or something along those lines. But I just put it out to----
    Ms. Schakowsky. Let me just say that I would certainly see 
that amendment as a friendly amendment to the legislation.
    Mr. Rohrabacher. I would not rule it out. I would suggest 
that we need to, you know, make a decision of what that date is 
and move forward.
    Ms. Sanchez. The gentleman yields back?
    The gentleman yields back his time.
    Any other Members?
    Mr. Keller?
    Mr. Keller. Thank you, Madam Chairwoman.
    I see Mr. Rohrabacher and Ms. Schakowsky co-sponsoring the 
bill. I am wondering if both of you have read it here. You seem 
such polar opposites philosophically, but you have come 
together on a good cause here.
    Ms. Schakowsky. Actually, we are best friends.
    Mr. Keller. Well, good deal.
    Do you agree with that characterization?
    Mr. Rohrabacher. Oh, yes, I do. And, in fact, I remember 
talking to a particular Republican leader on the floor and 
saying, ``Why are we opposing this? This is a no-brainer.''
    Mr. Keller. Yes.
    Mr. Rohrabacher. And then being assured, ``Well, do not 
worry. This is all redundant, and that is just a political 
maneuver on their part,'' and the fact is I believe that it was 
a political maneuver on the part of that Republican leader, 
unfortunately.
    Mr. Keller. Well, I saw Rohrabacher scribbling on a piece 
of paper ``Schakowsky BFF,'' and I wondered what that meant. 
Now I know. You are best friends forever.
    Let me ask you this, Mr. Rohrabacher. I could tell you were 
impassioned. You are a little upset. You felt you were 
misinformed about the motion to recommit that Ms. Schakowsky 
offered by you being told by someone that it was redundant. I 
am guessing--because I was not there--that they probably 
suspected that Ms. Schakowsky's concerns were already covered 
by these special circumstances provisions.
    I know that you feel that that provision is not adequate. 
Could you just elaborate on that?
    Mr. Rohrabacher. Well, I just, frankly, had my staff look 
this up and do an analysis for me, and they came to that 
conclusion that, no, they are not covered and they are not part 
of that category. Let me put it this way. When I got that 
report back, I was devastated.
    Mr. Keller. Right. What are you hearing--and this is to 
both of you--from your constituents about Reservists and 
Guardsmen being forced into bankruptcy by their call to active 
service?
    Ms. Schakowsky, maybe we will start with you.
    Ms. Schakowsky. Yes, we do hear about the financial 
problems of our service men and women. You know, we wanted to 
have veterans' service organizations to testify. We wanted to 
have that. But you know what? We identified some, and it is 
embarrassing. They felt embarrassed to come and talk about 
their personal financial problems.
    But there is no doubt that they exist, and, as I said, if 
you look at the front page of The Washington Post business 
section today, it talks about just how tough it really is for 
our returning National Guard and Reservists.
    Mr. Keller. So the problem is, in your observation, more 
widespread than most of us know because of the embarrassment 
that a lot of these folks do not come out and say how this is 
impacting them because they are----
    Ms. Schakowsky. Well, the other reason is because no 
records are actually being kept of that. So, while we know 
anecdotally and the veterans' service organizations know about 
it and our Department of Veterans Affairs knows about it, we 
actually do not have hard data to tell us that. So, you know, 
we do not know if it is 1,000 or 10,000. We know who these 
people are.
    Ms. Sanchez. Will the gentleman yield?
    Mr. Keller. Sure.
    Ms. Sanchez. In sort of setting up the two panels for 
today's hearing, we came to understand that when a debtor files 
for bankruptcy, there is no box that you check to identify 
yourself as a service member or not. So there is no particular 
way currently to keep those kinds of records, and I think, 
therefore, it is difficult for anybody to know how many people 
are affected.
    But we will be hearing from witnesses on the second panel 
much testimony about the members that it actually does affect.
    Mr. Keller. Right. Thank you.
    Mr. Rohrabacher. Well, if I could answer your question----
    Mr. Keller. Yes.
    Mr. Rohrabacher [continuing]. As well----
    Mr. Keller. And I will ask you what you are hearing 
anecdotally or statistically, whatever you heard.
    Mr. Rohrabacher. Right. Los Alamitos Reserve Center is in 
my district. Or, actually, it is on the edge of my district. It 
used to be in my district before redistricting. And many of the 
troops in Southern California, Reserves and National Guard 
troops, that have been away serving our country either deploy 
from Los Alamitos, or they come back to Southern California to 
Los Alamitos.
    I have made it my personal mission to go and see off every 
National Guard and Reserve unit that leaves from there that I 
can possibly do--it is part of my schedule if I am back there 
and not here in Washington--and to welcome them home as well, 
and so I have had a lot of interaction with Reserves and 
National Guard, and more than anything, you know, I have 
received the frustration of some of these people who are away 
from their families and while they are gone that their economic 
house is put in total disarray and they come back confused.
    They are frightened. They are frightened they are going to 
lose their home. Their whole life is different than it was a 
year before only because they have gone off and served their 
country, and just over and over again, I was told about this 
fear that they have, and that is why, as I say, when this 
motion to recommit came up originally--and there should be no 
doubt whether or not these people are put in an exceptional 
category. They should not be.
    And what is wrong with reaffirming if, indeed, they already 
are covered, which I do not believe they are? But if they are, 
if somebody says, ``Well, it can be argued that they are,'' 
well, let's just reaffirm it. What is the problem? And as I 
say, that motion to recommit should have been accepted because 
if it was redundant, why not reaffirm it?
    Just like today, there is no reason not to reaffirm it 
because these people need to know that we care about them, and 
they need to know when they are coming back and their total 
life is in chaos compared to 2 years before that they are not 
going to have a hammer come down on their head, and whether it 
is 6 months or a year, we can talk about that, but that came to 
me. That was the most spoken not complaint, but concern of 
these people who were leaving and coming back, and as I say, I 
must have done this 30 times over the last 5 years.
    Mr. Keller. Well, Madam Chairman----
    Ms. Sanchez. The time of----
    Mr. Keller [continuing]. I know my time has expired, but if 
you would just indulge me for a few seconds, I just want to 
commend both of my colleagues for working on this very worthy 
task to protect the Reservists and Guardsmen and their 
families, and I appreciate your bipartisan spirit and will 
yield back the balance of my time.
    Ms. Sanchez. Okay. The gentleman yields back.
    Are there any other Members who wish to be recognized?
    Mr. Feeney?
    Mr. Feeney is recognized for 5 minutes.
    Mr. Feeney. I think I just have one question. Is there a 
time limit for a Reservist under your bill in terms of their 
ability to take advantage of the provisions of your bill, and 
what is it, a year or 5 years?
    Ms. Schakowsky. Actually, it is only 180 days, which was 
the essence of what Mr. Delahunt was saying, that, in his view, 
it may be too short. You know, it was written rather modestly, 
but they would be exempt from the test only in our bill for 180 
days, and so, you know, I actually would concur and it is 
certainly worth considering that when they come back, getting 
everything in order, 6 months may be, in fact, too short.
    Mr. Feeney. Well, I thought Mr. Delahunt's question--maybe 
I misunderstood it--went to the length of time of the 6-month 
average income requirement. Maybe I misunderstood.
    Ms. Schakowsky. Yes. No, I think he was referring to--am I 
right about that--how long a Reservist or National Guardsman 
coming back could avail himself of this kind of protection.
    Mr. Watt. If the gentleman would yield, that is what he 
intended, as he discussed with me before he left.
    Mr. Feeney. Well, that is what you get for asking questions 
that are over our head down here, but that is the only question 
I had.
    Thank you.
    Ms. Sanchez. The gentleman yields back his time.
    Does the gentleman----
    Mr. Franks. Let me indulge to just ask one very brief 
question.
    Ms. Sanchez. Procedurally, does the gentleman from Florida 
yield back the balance of his time?
    Mr. Feeney. I would yield to the Ranking Member, Mr. 
Franks.
    Ms. Sanchez. Thank you.
    Mr. Franks?
    Mr. Franks. Thank you, Mr. Feeney. Thank you very much.
    Just to touch briefly on the statement that I made related 
to the national security clearance, I am wondering if one or 
both of you might look into that to see if there is any way 
that we might make sure that we at least consider that 
possibility so that it does not do the harm that Mr. Cannon was 
concerned about. The concern is that----
    Mr. Rohrabacher. Certainly. And I do not know if that would 
be considered specifically germane to the bill or not because 
it might be from a different Committee or something like that. 
It might force this into another Committee.
    Ms. Sanchez. It is probably within the jurisdiction of the 
Armed Services Committee and not the Commercial and 
Administrative Law Subcommittee.
    Ms. Schakowsky. And the other thing about this is, look, 
those people who are forced into bankruptcy now are doing it 
under more adverse circumstances, but they are still being 
forced into bankruptcy. So they are losing their security 
clearance regardless under current circumstances. So this does 
not really change that in any way or exacerbate it any more 
than that. But, you know, so I think it is not necessarily 
relevant to this particular bill.
    Mr. Franks. Thank you, Madam Chair.
    I guess the only other thing that I would reiterate then is 
just it is difficult, but maybe we ought to talk about ways 
that we could work once again to help these service people in 
ways that might not, you know, include bankruptcy, but to still 
address the financial issue, and I know that the both of you 
are certainly inclined to that direction.
    Mr. Rohrabacher. I would certainly support any piece of 
legislation that you might want to bring up on that, and it 
probably would complicate this particular legislation because 
it would be sending it to different Committee jurisdictions.
    Mr. Franks. All right. Thank you, Madam Chair. I yield 
back.
    Mr. Johnson. Madam Chair----
    Ms. Sanchez. The gentlemen----
    Mr. Feeney. And I yield----
    Ms. Sanchez. The gentleman from Florida yields back his 
time.
    And at this time, the gentleman from Georgia, Mr. Johnson, 
is recognized.
    Mr. Johnson. Thank you, Madam Chair.
    I have been asked by the Chairman of the full Committee, 
the Honorable John Conyers, Jr., to have his written statement 
inserted into the record.
    Ms. Sanchez. Without objection, so ordered.
    [The prepared statement of Chairman Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
  in Congress from the State of Michigan, Chairman, Committee on the 
 Judiciary, and Member, Subcommittee on Commercial and Administrative 
                                  Law

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Johnson. Thank you. I yield back.
    Ms. Sanchez. The gentleman yields back his time.
    I would like to thank our first panel of witnesses for 
their hard work on this very important piece of legislation. We 
appreciate your time and your staying to answer questions.
    And at this time, we will excuse our first panel, and we 
will take a brief recess to allow the second panel to come 
forward to the table.
    [Recess.]
    Ms. Sanchez. I am now pleased to introduce the witnesses 
for our second panel for today's hearing.
    Our first witness is Raymond Kelley. Mr. Kelley is the 
national legislative director for American Veterans, known as 
AMVETS, at the AMVETS National Headquarters in Lanham, 
Maryland. He is responsible for the planning, coordination, and 
implementation of AMVETS' relations with the United States 
Congress and Federal departments and agencies and other 
organizations. He develops and executes AMVETS Washington 
agenda in areas of budget, appropriations, health care, 
veterans' benefits issues, national security, and foreign 
policy. Mr. Kelley's work also includes building relationships 
with other non-profit organizations and developing plans to 
promote veteran transitions to civilian life after their 
service.
    Mr. Kelley served 6 years in the United States Marine 
Corps, he also served in the Army Reserve, and in April of 
2006, he was deployed to Iraq as the Psychological Operations 
Team leader. Mr. Kelley serviced for 12 months in the base of 
the Sunni-Shiite triangle and continues to serve in the Army 
Reserve.
    Welcome to you, Mr. Kelley.
    Our second witness is Jack Williams. Professor Williams 
serves as the Robert M. Zinman Resident Scholar at the American 
Bankruptcy Institute and was also the inaugural ABI Resident 
Scholar when the ABI endowment fund created the program in 
2001. As the ABI Resident Scholar, Professor Williams assists 
ABI with its educational programming and in its role as the 
authoritative source of bankruptcy information for the 
Congress, media, and public.
    Professor Williams teaches at Georgia State University 
College of Law. He instructs an assortment of courses on 
bankruptcy and taxation. He also teaches at the New York Law 
School LLM program in taxation, the New York University School 
of Law continuing professional education program, the Internal 
Revenue Service, and the Federal Law Enforcement Training 
Center.
    Welcome to you, Mr. Williams.
    Our final witness is Ed Boltz who appears on behalf of the 
National Association of Bankruptcy Attorneys, NACBA. Mr. Boltz 
is a member of the law offices of John T. Orcutt, P.C., where 
he represents clients in not only Chapter 13 and Chapter 7 
bankruptcies, but also in related consumer rights litigation, 
including fighting abusive mortgage practices.
    In addition to serving on the board of directors for NACBA 
where he is jointly responsible for directing the State chair 
program, Mr. Boltz serves on the Bankruptcy Council for the 
North Carolina Bar Association and previously served as the 
bankruptcy chair for the North Carolina Association of Trial 
Lawyers. Mr. Boltz moderated the panel Military Members Deep in 
Debt at the 2007 convention of NACBA.
    I would like to welcome you all here today.
    And at this time, I would invite Mr. Kelley to begin his 
testimony.

TESTIMONY OF RAYMOND C. KELLEY, NATIONAL LEGISLATIVE DIRECTOR, 
                       AMVETS, LANHAM, MD

    Mr. Kelley. Thank you, Madam Chair, Members of the 
Subcommittee. Thank you for inviting AMVETS to present our 
views today.
    Ms. Sanchez. Pardon me, Mr. Kelley. Is your microphone on?
    Mr. Kelley. Yes, ma'am.
    Ms. Sanchez. Can you move that a little bit closer?
    Mr. Kelley. Is this better?
    Ms. Sanchez. That is much better. Thank you so much. We 
will restart your time.
    Mr. Kelley. Thank you.
    Thank you, Madam Chair, Members of the Subcommittee, for 
holding this hearing today, and thank you for inviting AMVETS 
to present our views concerning H.R. 4044.
    I want to start by saying AMVETS wholly supports H.R. 4044, 
but it was not until after we had a long debate within our 
office on the substance of this bill. But, at the end of the 
day, we decided that it was better for the veterans, so we had 
to do it.
    My first reaction when I read this piece of legislation 
was: What does this say about our priorities as a Nation when 
the women and men of our National Guard and Reserve must have a 
provision enacted that will allow them to more easily file for 
bankruptcy if they have served on active duty? Why aren't we 
paying them enough to sustain their financial wellbeing? It was 
the basis of our debate. But, at the end of the day, we must do 
everything we can for our veterans and ease the pains of these 
noble citizens.
    Currently, there are 18,252 National Guard and 8,288 
Reserve members serving in Iraq, Afghanistan, and along our 
southern border in Operation Jump Start; 500,000 Guard and 
Reserve members have served in Iraq and Afghanistan since 2001, 
with 25 percent of those serving multiple tours. The Guard and 
Reserve was not developed to sustain this type of TEMPO, and it 
has only placed a greater burden on those who have served.
    In my written testimony, I have provided a couple of tables 
to provide insight on the income deficits that the National 
Guard and Reserve face, and I put in there what Reserve members 
would receive if they lived in Illinois in the Springfield area 
and they deployed to Iraq, and it was about $47,000 a year. Now 
that did not include the combat pay and the tax breaks that 
they receive, which ends up being about $4,700 per year. But, 
at the end of the day, it is still about $10,000 less than what 
a person in Illinois would make on average with the same amount 
of time and service as in their civilian employment. So we are 
still $5,000 to $6,000 short on that deficit.
    And those who serve stateside in support roles and those 
who are serving along the southern border do not receive the 
benefit of that combat pay or the incentive of the tax 
exemption. This adds only to the financial hardship. The fact 
is that these 1-year tours generally end up being 16 months to 
24 months, and during the time that they are mobilizing, they 
do not receive that combat pay or the tax incentive.
    I will use myself as an anecdotal case. I served in Iraq. I 
started in April of 2006, but I started training to go to Iraq 
in November of 2005. So 5 months prior, I was committed to 
serving with the Army Reserve before I left and did not receive 
the incentive pay. And if I had to redeploy today, I would have 
to take an equity loan on my home to make sure that my family 
stayed at the same financial status and paid their bills, to 
sustain their way of life.
    This financial hardship does not stop when they return. 
Many of these National Guard and Reservists are either full-
time or part-time students and are trying to support a family, 
and when they leave to go on active duty, they have to 
disenroll from school and leave these part-time jobs, and when 
they return, they have to find new jobs and re-enroll to 
unsympathetic universities and employers. So it sets them back. 
These members have to pay to re-enroll to the same school that 
they were in, and then they have to reapply for the G.I. bill 
which can take 3 months before they start getting paid again.
    And many employers do not understand or adhere to the 
USERRA laws, making it difficult for Guard and Reserve members 
to return to the jobs that they have left. USERRA is in place 
to protect Guard and Reserve members from discrimination while 
they serve, but a 2002 report showed that USERRA violations 
increased by 35 percent in 2002 and each year subsequent after 
that, there has been a 10 percent increase.
    It is important to do everything we can to protect and 
support our Guard and Reserve, and that is why AMVETS asks this 
Subcommittee to act positively on H.R. 4044.
    And that concludes my testimony. I will be happy to answer 
any questions.
    [The prepared statement of Mr. Kelley follows:]
                Prepared Statement of Raymond C. Kelley

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Sanchez. Thank you, Mr. Kelley. We appreciate your 
testimony.
    At this time, I would invite Professor Williams to proceed 
with his testimony.
    Can you----
    Mr. Williams. Excuse me. Thank you very much.
    Ms. Sanchez. There we go.

 TESTIMONY OF JACK F. WILLIAMS, SCHOLAR-IN-RESIDENCE, AMERICAN 
              BANKRUPTCY INSTITUTE, ALEXANDRIA, VA

    Mr. Williams. Madam Chair, Members of the Subcommittee, my 
name is Jack Williams, and it is a pleasure and honor to be 
here before you all today. As mentioned, I am a professor of 
law at Georgia State University College of Law in Atlanta, 
Georgia, and also the Robert M. Zinman American Bankruptcy 
Institute Scholar-in-Residence.
    Today's subject is not new to me. For over 20 years now, I 
have devoted time to military personnel issues, including debt, 
payday loans, credit counseling, bankruptcy, and security 
clearance issues. Along with a colleague of mine, Susan Seabury 
of BDO Seidman, and a number of volunteer law students, I have 
represented on a pro bono basis several service members, mostly 
from the Georgia and the Southeastern Region, with serious and 
pressing financial issues. Recently, along with Ms. Seabury, I 
completed a research project and report on Debt, Bankruptcy and 
the Servicemember Civil Relief Act, which will be published by 
Norton's Annual Survey of Bankruptcy Law.
    What I would like to do today is use my time to describe 
the scope of the legislation that is pending, how the 
bankruptcy process works with service members without the 
legislation, how it would work with the legislation, and then 
talk very briefly on some of the consequences of financial 
distress that our service members experience, including things 
like the potential possibility of criminal sanctions under the 
Uniform Code of Military Justice where the loss of security 
clearance is associated with not aggressively managing one's 
financial situation.
    When we look at the scope of the legislation, we see that 
it is targeted, specific, and quite modest. In fact, it is very 
much an extension of what already exists under section 707 of 
the Bankruptcy Code. In particular, we already exempt from the 
presumption of abuse disabled veterans, but we would be 
essentially extending that exemption from the presumption of 
abuse of the bankruptcy process, which we commonly refer to as 
the means test. We would exempt that presumption of abuse in 
the context of activated Reservists and National Guardsmen, 
clearly the citizen soldiers of this country that we are 
talking about today, and there is a very short time window, a 
6-month time window from their leaving active duty, that they 
could take advantage of this particular provision.
    So we are talking about in the language itself very limited 
scope in its application, modest and targeted to address a 
particular issue, as the financial distress that is caused in 
part by activation of citizen soldiers for an extended period 
of time.
    The other point I would like to make is that based on the 
most recent data, which would be about 2004 in a study by the 
Department of Defense, we see about 16,000 service member 
bankruptcy filings a year. That number has not been rolled 
forward to the present time period, but if one were to use the 
percentages that existed in 2004 and rolled it forward, we 
would probably be looking at somewhere between 18,000 to 20,000 
bankruptcy filings by active duty service members.
    Of that amount, there would be a smaller amount that would 
probably refer to Reservists and National Guardsmen, and we 
could estimate somewhere between 2,000 to 2,500 members that 
might be affected, Reservists and National Guardsmen, that may 
seek relief under this particular provision. And we might think 
that is not a very big number in the scheme of things, but, as 
my father taught me, sometimes it is the quality and not the 
quantity, that it is magnitude and not the quantity, and so 
there is a question of numbers that in the absolute or even 
relatively speaking might be very small, nonetheless, would be 
very important.
    Now the way the means test works right now is that if 
someone's income is below the median income for that State, the 
means test will not apply. If it does apply, however, then the 
burden is upon the service member to rebut that presumption. If 
he rebuts that presumption, he has to do it usually in sworn 
testimony based on the facts and circumstances.
    What this legislation would do is change that. The 
presumption would be not of abuse. The presumption would be 
that they would be eligible for the relief they sought, and if 
abuse was present, then the United States Trustee or another 
watchdog could challenge it and, ultimately, based on the facts 
and circumstances of each individualized case, can make a 
determination of whether the service member has abused the 
bankruptcy process. That does not change by the enactment of 
this particular bill.
    I see I am out of time. Thank you very much.
    [The prepared statement of Mr. Williams follows:]
                 Prepared Statement of Jack F. Williams

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Sanchez. Thank you for your testimony.
    At this time, I would invite Mr. Boltz to proceed with his 
testimony.

   TESTIMONY OF EDWARD C. BOLTZ, THE LAW OFFICES OF JOHN T. 
ORCUTT, P.C., DURHAM, NC, ON BEHALF OF THE NATIONAL ASSOCIATION 
                OF CONSUMER BANKRUPTCY ATTORNEYS

    Mr. Boltz. Chairwoman Sanchez and Members of the 
Subcommittee, I thank you for inviting me to speak before you 
on H.R. 4044, which would exclude Reservists and military 
National Guard members serving on active duty from the means 
test under the Bankruptcy Code.
    As a consumer bankruptcy attorney in North Carolina, I have 
the privilege of representing military service members from the 
Fort Bragg area as well as Reservists and National Guards 
throughout serving from North Carolina. I have also had the 
privilege of speaking on military matters previously and have 
some acquaintance with the security issue that Mr. Franks has 
raised also.
    The means test, as enacted by the Bankruptcy Abuse and 
Consumer Protection Act of 2005, enacts some mechanical 
calculation of a debtor's ability to repay their debt and 
whether they are entitled to a discharge in Chapter 7 and, if 
they are in a Chapter 13 bankruptcy, how much they are required 
to pay to their creditors in that case.
    The starting point for this mechanical calculation is what 
is called their current monthly income. This is a historical 
amount which looks at the 6 months preceding the filing of the 
bankruptcy to determine what the debtor's income is going 
forward for their bankruptcy case, either Chapter 7 or Chapter 
13.
    Because of the nature of military service, upon returning 
from overseas, a service member is likely to face not only a 
loss of their military income, which is heightened in cases 
where they served in a combat zone by not only their imminent 
hazard pay, but also by a family separate allowance, and also 
basically a cashout for a per diem allowance for their daily 
pay of about $3.50 over a 15-month period of time. That is 
almost $1,600, however.
    These amounts heighten a debtor's current monthly income 
which bears no relation to their actual income upon return home 
which may be less, it may be more, it may be nothing based on 
their work situation. They, nonetheless, face difficulties with 
the bankruptcy. They would be subject to a presumption of abuse 
or a requirement that they pay that money which does not 
actually exist in the Chapter 13 case.
    In some cases, this has caused clients of mine to have to 
wait for a period of as long as 6 months to file a bankruptcy. 
In some circumstances, this involves just gritting their teeth 
and getting through 6 months of phone calls and collection 
attempts from their creditors. Where the debtor is facing 
foreclosure, repossession, or garnishment of their wages, this 
is time that they cannot wait, however, and the peculiarities 
of the means test are not something they can wait to sort 
themselves out.
    This is particularly true for those in the military who not 
only face the normal debt collection difficulties, but they 
face possible court martial under the Uniform Code of Military 
Justice for dishonorably failing to pay their debt and also 
threats of loss of security clearance.
    These are problems that exist regardless of the bankruptcy 
and, in many instances, the bankruptcy prevents these problems. 
Routinely, we have soldiers--and I say soldiers, but this would 
true for all branches of the military--where their commanding 
officers have, in fact, advised them to file bankruptcy to 
avoid prosecution or other disciplinary problems.
    We believe that H.R. 4044 is a very narrow and modest 
approach to this problem. It is similar to the approach taken 
for disabled veterans that Representative Rohrabacher mentioned 
previously, and military Reservists would still be subject to 
court review under a totality of the circumstances, tests in 
the Bankruptcy Code, and in a Chapter 13, they would still be s 
subject to a good faith test that their case was filed in good 
faith and they were making an attempt to repay their debt in an 
appropriate manner, returning them, in effect, to the pre-2005 
statue.
    Lastly, at a time of war, H.R. 4044 would further the 
laudable and important goals of the Servicemembers Civil Relief 
Act, which provides for strengthening and expediting the 
national defense, by removing this as a distraction for our 
service members and removing it from the calculus in deciding 
whether they can afford to serve.
    Thank you for your time.
    [The prepared statement of Mr. Boltz follows:]
                 Prepared Statement of Edward C. Boltz

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Sanchez. Thank you, Mr. Boltz.
    We will now begin with questioning, and I will begin by 
recognizing myself for 5 minutes.
    Mr. Kelley, we tried to have a member of the National Guard 
or the Reserve to testify at today's hearing, but we 
encountered a high degree of reluctance to do so. Can you 
explain to us why that was so?
    Mr. Kelley. I ran into the same problem. After I found out 
that your office was having a difficult time finding someone, I 
put a search out, and I think you would find it in any segment 
of society, it is not just exclusive to people in the military, 
that admitting your financial difficulty in a public forum is 
very difficult, and you do not want that to be part of the 
public record. I would assume that you would want to secretly 
put all of this behind you and try to move forward. So 
rehashing it or making it on a public forum would be very 
difficult.
    Ms. Sanchez. Right. We actually encountered in another 
hearing that we did on USERRA in another Subcommittee that I 
serve--the difficulty of people not wanting to malign the 
military or say anything that might be construed as maligning 
the military and a huge degree of reluctance on the part of 
service members who are experiencing financial difficulty to 
actually talk in an open forum about it.
    Professor Williams, Bankruptcy Code section 707(b)(2)(D) 
already provides an exception to the means test for a disabled 
veteran whose indebtedness was primarily incurred while on 
active duty, and as you stated, H.R. 4044 would just add a 
further limited exception for certain qualifying members of the 
National Guard and the Reserve. Do you see any reason why this 
further exception could be problematic by extending it to these 
Reservists?
    Mr. Williams. No. The proposal is a modest extension of 
existing law and would be consistent with the general structure 
of the means test and the presumption of abuse, the totality of 
circumstances test, and finding abuse would be consistent and 
in harmony with most provisions of the Bankruptcy Code as well 
as the Servicemembers Civil Relief Act.
    Ms. Sanchez. And because we are dealing with presumptions, 
there still is discretion on the part of a bankruptcy judge to 
look at a case and find that there is, in fact, any kind of 
abuse, even though this exemption would exist presumably if we 
enacted it.
    Mr. Williams. Absolutely. In fact, failing the means test 
that otherwise would not apply could be a factor that a court 
considers under the totality of the circumstances. It just 
means that the presumption is not a presumption against the 
service member. The presumption would be the presumption in 
favor of the service member seeking relief, and it would be 
incumbent on any party and interest to challenge the debtor's 
eligibility to proceed under Chapter 7.
    Ms. Sanchez. Thank you.
    Mr. Boltz, you assert that the means test presents 
particular difficulties for members of the military who have 
received combat pay. Why can't the service member simply 
explain that his or her temporary receipt of a higher income is 
a special circumstance?
    Mr. Boltz. Chairwoman Sanchez, they can do that. One of the 
difficulties with that is that it is both an unpredictable 
outcome and a costly outcome. It is unpredictable in terms that 
the service member would have the burden of rebutting the 
presumption which is not something taken lightly by courts and 
would place the burden on someone who has already borne a 
burden overseas for this Nation. And it would be costly both in 
terms of additional costs for paying their attorney for this 
representation and also in terms of their time spent in the 
hearings that would ensue on this.
    In special circumstances, the case law that has developed 
since 2005 on this has held that it is a very high standard for 
special circumstances, not something that can be rebutted 
easily, and this would entail, in my experience, a hearing that 
would last the better part of a day for a debtor which, again, 
dovetails with what Mr. Kelley previously testified, which also 
carries with it the stigma and embarrassment that someone would 
have.
    When people file for bankruptcy, one of the main things 
they look to me as their attorney for is to tell them what is 
going to happen, and, right now, when it comes to this sort of 
thing, I can tell them, you know, ``You are throwing yourself 
on the mercy of a court,'' which is not a palatable answer.
    Ms. Sanchez. Not a very pleasant thing to do.
    H.R. 4044 is the bill that has been proposed, and it is 
limited to members of the National Guard and the Reserve. Do 
you think it should apply to other members of the military?
    Mr. Boltz. I do think that other members of the military 
who have returned from combat duty face similar difficulties 
with this. So I would urge the Committee to consider that. That 
would be a vast expansion of what is right now a pretty narrow 
bill because, again, upon returning from active combat duty in 
Iraq or Afghanistan or other combat zones, a regular military 
service member would face a reduction in their income, and for 
a period of 6 months, that would prejudice them in a bankruptcy 
proceeding, but, you know, with this narrow bill as it is, I 
believe it is appropriate.
    Ms. Sanchez. Thank you, Mr. Boltz.
    My time has expired.
    At this time, I would recognize the gentleman from Arizona, 
Mr. Franks, for 5 minutes.
    Mr. Franks. Well, thank you, Madam Chair.
    I thank all of you for being here today.
    Mr. Boltz, I am really impressed with your knowledge here. 
All of you. But I do not even think you read your statement, 
did you?
    Mr. Boltz. No, I did not, sir.
    Mr. Franks. Yes, sir. Well, some of us have to have a 
script for everything.
    Some argue that the means test already gives a break to 
those who are earning less than the applicable State median 
income and those in special circumstances. If that is the case, 
isn't this bill potentially aimed at benefiting the wealthier 
Reservists and the Guardsmen who do not present special 
circumstances, like the colonels and not the privates, and do 
we take that into account.
    And, Mr. Boltz, I will----
    Mr. Boltz. Mr. Franks, it is true that in a Chapter 7 
proceeding, those who are below the State median income are not 
subjected to the means test. They are still subjected to the 
totality of the circumstances abuse case which would be the 
same following this amendment.
    However, in a Chapter 13 proceeding, debtors are subject to 
the means test whether they are above or below the median 
income because this means test is what is used to determine how 
much a debtor has to pay to their unsecured creditors in a 
Chapter 13 case. And for many service members who are 
returning, if they are facing foreclosure or repossession of a 
car, Chapter 7 does not stop those proceedings, would not save 
their home or their car, and they are forced to turn to Chapter 
13.
    And that is where more and more debtors, particularly in 
the current economy, including military debtors, are forced to 
go, and even when they are below that median income, the 
amendment would protect them from having to pay income that 
they no longer have.
    Mr. Franks. Sometimes, you know, we forget to ask a salient 
question. If you were trying to improve this legislation or if 
you could do one thing to address the underlying purpose of the 
legislation, what would you do to make it better? Do you have 
any thoughts about how we could either improve this legislation 
or to address the soldiers' issues in a better way?
    And, Professor Williams, I might ask you first and let the 
others address it as they will.
    Mr. Williams. Thank you, Mr. Franks.
    We should recognize that any bankruptcy answer is the 
second best solution, that it only applies after service 
members are in financial distress--and serous financial 
distress--so that any modification to the Bankruptcy Code only 
solves a very small problem of what is a much larger problem.
    The much larger problem here is military personnel debt 
load, and we are talking about a very large problem. Fifty-six 
percent of enlisted military personnel report difficulty with 
family finances, and 47 percent of service members say they are 
in over their head with their own expenses.
    Now this is a modest proposal, but I would suggest that we 
think broader at some particular point in time and look at the 
overall problem that service members face in regard to 
financial debt. Congress has done a number of things, amending 
the Servicemembers Civil Relief Act, capping the interest rate 
on payday loans, a number of things, and is moving, I think, to 
a more holistic and robust view.
    I would applaud what Congress has done in the past and 
suggest that that is the appropriate road and the long-term 
road to resolve the issues of financial distress and the 
negative consequences, not only the human toll, but the toll on 
one's profession because there are serious security clearance 
consequences associated with financial distress in the military 
that may foreclose one's career and service in the military as 
well.
    Mr. Franks. Mr. Kelley, do you have any thoughts there?
    Mr. Kelley. Yes. About the first question, I do not think 
anybody in the military would abuse this because of the fact of 
what we mentioned about the security clearances and how it will 
affect their career. And the only people that could really 
abuse it, in my estimate, are officers and higher enlisted 
people who have decided to make this a career. So they would, 
in essence, be ending their career to file for bankruptcy, 
especially if it was unneeded.
    To improve this bill, I think the only thing that I would 
consider, because I like the narrow scope of it, is active duty 
military personnel who have been extended to go to Iraq or 
Afghanistan, and when they come back, they are immediately 
separated. So they are, in essence, unemployed when they return 
to the United States and have not had a chance to look for 
employment, look to get into a college, to do all the things 
that the rest of us do to network when we move from one career 
field to another. That opportunity is not afforded to them. So 
I would consider adding those who are separated immediately 
from active duty to this bill.
    Mr. Franks. Thank you, Madam Chair.
    Thank you, all of you.
    Ms. Sanchez. Mr. Boltz, did you want to respond to that 
question?
    Mr. Boltz. I would just second Mr. Delahunt's suggestion 
that perhaps it be extended from 180 days to 1 year for both 
technical reasons. Strictly speaking, the means test does not 
look at the last 6 months. It looks at the last 6 months 
preceding the filing. So if you file a case on the last day of 
a month, say you filed yesterday, it would not look at 6 months 
before March 31, it would look at February, January, December 
and back for 6 months. And also for practical reasons, someone, 
as was just stated, leaving the military, it takes a little 
while to get back on your feet and get, I guess, your land legs 
back under you under civilian law.
    Ms. Sanchez. Yes, I noticed some head-shaking. Mr. Kelley 
and Mr. Williams, do you agree with the suggestion of extending 
that to 1 year?
    Mr. Kelley. AMVETS would agree.
    Mr. Williams. Personally, I would agree with that 
suggestion.
    Ms. Sanchez. Thank you.
    The gentleman's time has expired.
    At this time, I would recognize Mr. Johnson for 5 minutes 
for questions.
    Mr. Johnson. Thank you, Madam Chair.
    Professor Williams, last October, this Subcommittee 
conducted an oversight hearing on the United States Trustee 
program, and according to Director Cliff White's testimony, 
approximately .63 percent of consumer cases are ultimately 
dismissed for abuse under the new means testing criteria. This 
means that well less than 1 percent of Chapter 7 cases are 
dismissed for abuse, even though proponents of these reforms 
claimed that the percent was likely to be 10 times higher. 
Given the complexity and cost of implementing the means test, 
what value does it actually provide?
    Mr. Williams. As a general question, it provides, I think, 
two things.
    Primarily, it is a statement to the government that those 
who have the ability to pay substantial amounts of future 
income to reduce the significant portion of debt should do so 
and that the government has identified that as a good.
    And, second, it suggests to those who are contemplating 
bankruptcy that may tend toward abuse that this will not be a 
welcome forum or venue and, therefore, the number, although it 
may be perfectly accurate, may actually undercount potential 
abusers who believe that they will be ferreted out and caught 
if they file a bankruptcy petition and purport to abuse the 
system.
    Whether that, in fact, outweighs the increased level of 
complexity and cost that a large number of people have to incur 
is another question, and whether government should in drafting 
legislation of a remedial nature should presume for any section 
of its citizenry abuse is also another question. But I think 
there are some advantages, there are some benefits, to a means 
testing mechanism. Whether this is the right way is subject to 
debate based on its complexity and increased costs and the 
results that you have identified.
    Mr. Johnson. Mr. Boltz, what would be your response?
    Mr. Boltz. In regards to the benefits that the means test 
provides?
    Mr. Johnson. Yes.
    Mr. Boltz. From my clients' point of view and from mine, 
the main benefit that has resulted from the means test is that 
most of my clients, again, look to me for predictability, and 
this provides a means where I can tell them, you know, largely 
what will happen to them in their bankruptcy case by using a 
standardized mechanical test. It is harsh on many people who do 
not fit that test, and it also requires people not to be able 
to file perhaps when they need to. They may have to wait for 
after a deployment or after their unemployment has lasted a 
period of time.
    Mr. Johnson. It actually increases the attorneys' fees that 
are charged to people who would otherwise be looking to file a 
Chapter 7, and it thrusts probably more people into pro se 
status trying to file Chapter 7s. Would you agree to that?
    Mr. Boltz. I would agree. I would agree with both the 
attorney fees and, anecdotally, I will say there are more 
people who file pro se Chapter 7s, yes.
    Mr. Johnson. And do you agree, Professor Williams, as well?
    Mr. Williams. Yes, I do on both points.
    Mr. Johnson. Yes. How long would it take a pro se debtor to 
complete means test form 22, which consists of 52 sections?
    Mr. Boltz. Well, with the assistance of counsel, you----
    Mr. Johnson. Well, I mean, a pro se----
    Mr. Boltz. A pro se debtor----
    Mr. Johnson. A pro se without assistance.
    Mr. Boltz. Without assistance, I would honestly say that 
many would not be able to complete it. For me to do it, it 
requires a computer program because the numbers shift as they 
adjust. So, for a pro se debtor, it would take probably 10 to 
12 hours, I would expect, to gather the information and 
complete that based on the amount of time it takes with my 
assistance. On every case, we probably spend upward of two to 3 
hours completing it.
    Mr. Johnson. Okay.
    Professor Williams?
    Mr. Williams. I would agree with that assessment. It is a 
complex process.
    Mr. Johnson. So, given the fact that only 1 percent or less 
than 1 percent of the filings result in a dismissal based on 
abuse, it just appears that this means test may not be a good 
thing, especially for our service men and women who are both 
active duty as well as Reserve and National Guard who come back 
and are separated and then encounter financial problems based 
on their being deployed.
    So I know we are not going that far with this limited 
proposal here, but this limited proposal seems to certainly 
provide some relief to a key constituency that needs 
protection. So thank you.
    Ms. Sanchez. The time of the gentleman has expired.
    Mr. Keller is recognized for 5 minutes for questions.
    Mr. Keller. Thank you, Madam Chairwoman.
    Professor Williams, you teach bankruptcy law. Is that 
right?
    Mr. Williams. That is correct.
    Mr. Keller. Mr. Boltz, you are a practicing bankruptcy 
lawyer?
    Mr. Boltz. That is correct.
    Mr. Keller. Were you both here for the testimony of 
Congressman Rohrabacher?
    Mr. Boltz. Yes.
    Mr. Williams. Yes.
    Mr. Keller. You may recall him saying that he felt he was 
misinformed when he was told by someone that essentially the 
provisions that this bill has are not needed because they are 
redundant, and I imagine what he meant by that is it was 
already covered by the special circumstances provision. Do you 
recall that?
    Mr. Boltz. That is what I understood him to say.
    Mr. Keller. Well, as a practicing bankruptcy lawyer and a 
bankruptcy professor--and we will start with the lawyer--give 
us on this Committee an idea as to why the service men exempted 
by this legislation do not already qualify for relief under the 
means test special circumstances provision.
    Mr. Boltz. Under the means test special circumstances 
provision that would be used by someone in a Chapter 7 case to 
rebut the presumption of abuse that had arisen because they had 
failed the means test in essence under 707(b)(2), the 
difficulty that that presents is that it, as I said earlier, 
again turns that case back to the bankruptcy judge on a 
subjective basis to determine the military debtor's 
circumstances and what their ability to pay would be based on 
their previous income.
    Mr. Keller. You are concerned that the judge would not rule 
favorably for the Reservists or Guardsmen under this objective 
test?
    Mr. Boltz. In my experience, the bankruptcy judges I appear 
in front of in North Carolina, which are several, have 
obviously shown a great deal of deference and concern for 
military debtors in the past. They are a heroic segment of our 
society, and they have gotten that deference.
    But even if there were a finding that there were special 
circumstances that justified a bankruptcy discharge, it is 
nonetheless a grueling proceeding. Generally, I have not faced 
one on this issue because we have----
    Mr. Keller. You say a grueling procedure, like a day-long 
evidentiary hearing?
    Mr. Boltz. A day-long evidentiary hearing and also 
substantial pretrial discovery on this. And the court officials 
who are in essence the prosecutors, whether it is the U.S. 
Trustee or North Carolina where we have the bankruptcy 
administrators, they do not generally just stick to the issue 
of you are in the military. They dig into every aspect of the 
debtor's finances.
    Mr. Keller. So, while the Reservists or Guardsmen may 
ultimately prevail in front of a sympathetic bankruptcy judge, 
they would incur substantial litigation costs and attorneys 
fees by going through the process of proving that they qualify 
for the special circumstances?
    Mr. Boltz. Yes. And, again, both the litigation costs and 
the time for themselves, which, again, as they are trying to 
get back on their feet and find their way back into civilian 
society is something that they can ill afford.
    Mr. Keller. I see.
    Professor Williams, do you have anything to add as to why 
the special circumstances provision is inadequate under the 
circumstances to protect the Reservists and Guardsmen?
    Mr. Williams. I would add that from a descriptive 
perspective that these situations present themselves while a 
Reservist or a Guardsman is actually on active duty. That would 
require, in some instances, courts conducting a telephonic 
hearing with service members stationed in Iraq or Afghanistan 
or other areas across the world. That adds to the complexity of 
the determination under the totality of circumstances test, 
notwithstanding the special exception.
    Mr. Keller. Okay. Mr. Kelley, do you have a sense of how 
many Reservists and Guardsmen are facing insolvency by their 
calls to active service?
    Mr. Kelley. The National Guard put out an estimate that 40 
percent of all Guardsmen are in some sort of financial 
hardship. To what degree, they do not describe, but----
    Mr. Keller. Let me fire off a quick question before my time 
expires to you again, Mr. Kelley. I heard you mention something 
about concerns about veterans coming back from Iraq and 
Afghanistan being able to go to college and having other 
similar opportunity. Is it your view that we should somehow 
update or expand the G.I. bill to provide for more generous 
college opportunities, and if that is your view, do you want to 
tell us any specific bills or proposals you think that Congress 
should put on the front burner?
    Mr. Kelley. Yes. AMVETS wholly supports S. 22, Senator 
Webb's post-9/11 G.I. bill reform.
    Mr. Keller. Thank you, Mr. Kelley.
    My time has expired.
    Ms. Sanchez. The time of the gentleman has expired.
    Mr. Watt is recognized for 5 minutes for questions.
    Mr. Watt. Thank you, Madam Chair.
    And let me start by just saying to Mr. Kelley, I can 
understand the vexing that AMVETS had to go through about this. 
We share those concerns that service people should not be in 
the position of having to deal with this, but, unfortunately, 
that is not currently the case. So I applaud your decision to, 
after going through that debate internally, provide your 
support for the bill.
    In addition to Mr. Delahunt's comment about extending the 
term to a year at least or more or something longer than 6 
months, certainly, the one concern I expressed about the bill 
was that it does not seem appropriately titled. I hope that 
Professor Williams and Mr. Boltz will take a close look at the 
way the bill is described.
    I do not think it was the actual body of the bill itself 
accomplishes what I think was intended, but the way it is 
described to create an exemption from the means test I do not 
think is the appropriate thing that we are doing because the 
means test is a good thing and we are not trying to exempt 
people from it. We are trying to give them a benefit of it, 
regardless of their income levels, as I understand it.
    So we need a better description for the bill in the 
preamble, I guess, it would be or in the title to the bill, and 
I hope you will give us some suggestions on that. I do not 
expect you to do that. I know you did not come to talk about 
the packaging today. You came to talk about the substance, but 
it does need to be packaged correctly, too, and titled 
correctly, and both Mr. Rohrabacher and Ms. Schakowsky 
acknowledged, after I raised the issue with them, that they do 
not have a good title for the bill, and so if you all could 
help us with that, I think that would be non-controversial in a 
markup of the bill, as might extending the term from the 6-
month term to 12 months.
    Other than that, I think the bill is fine and appreciate 
your all's support and input, and I am hopeful that this is 
something that we can do on a bipartisan basis and help our 
service people. And then we can turn our attention to the real 
problem, which is trying to solve their financial issues that 
will prevent them and others from getting into situations where 
they have to pursue this last resort, bankruptcy.
    I heard Professor Williams' comment that when you are here, 
you have already reached the end of the road and we need to try 
to prevent more people from being here and reaching the end of 
the road, service people and non-service people, and we are 
trying to address a number of those issues as we go forward.
    So thank you. I did not ask any questions. I just made my 
opening statement, I guess. But if you all have got a question 
that you want to answer, I will give you the rest of my time to 
answer it or I will yield it back.
    Ms. Sanchez. Any takers?
    Mr. Watt. In that case, I yield back.
    Ms. Sanchez. The gentleman yields back the balance of his 
time.
    I want to thank the witnesses for their testimony today.
    Without objection, Members will have 5 legislative days to 
submit any additional written questions which we will forward 
to the witnesses and ask that you answer as promptly as you can 
so that they can be made a part of the record.
    Without objection, the record will remain open for 5 
legislative days for the submission of any additional 
materials.
    Again, I want to thank everybody for their time and their 
patience, and this hearing of the Subcommittee on Commercial 
and Administrative Law is adjourned.
    [Whereupon, at 3:34 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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               Material Submitted for the Hearing Record

Answers to Post-Hearing Questions from the Honorable Janice Schakowsky, 
        a Representative in Congress from the State of Illinois

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Answers to Post-Hearing Questions from the Honorable Dana Rohrabacher, 
       a Representative in Congress from the State of California

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

       Answers to Post-Hearing Questions from Raymond C. Kelley, 
           National Legislative Director, AMVETS, Lanham, MD

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Answers to Post-Hearing Questions from Jack F. Williams, Scholar-in-
        Residence, American Bankruptcy Institute, Alexandria, VA

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  Answers to Post-Hearing Questions from Ed Boltz, the Law Offices of 
John T. Orcutt, P.C., Durham, NC, on behalf of the National Association 
                    of Consumer Bankruptcy Attorneys

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 
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