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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 

(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

LINDA T. SA ́ NCHEZ, California 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

BETTY SUTTON, Ohio 

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ARTUR DAVIS, Alabama 

DEBBIE WASSERMAN SCHULTZ, Florida 

KEITH ELLISON, Minnesota 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

PERRY APELBAUM, Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 

SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW

LINDA T. SA ́ NCHEZ, California, Chairwoman 

JOHN CONYERS, JR., Michigan 

HANK JOHNSON, Georgia 

ZOE LOFGREN, California 

WILLIAM D. DELAHUNT, Massachusetts 

MELVIN L. WATT, North Carolina 

STEVE COHEN, Tennessee 

CHRIS CANNON, Utah 

JIM JORDAN, Ohio 

RIC KELLER, Florida 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

MICHONE JOHNSON, Chief Counsel 

DANIEL FLORES, Minority Counsel 

(III) 

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. Sa ́nchez, 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 

Page

IV 

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 

(1) 

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. 

Sa ́nchez (Chairwoman of the Subcommittee) presiding. 

Present: Representatives Conyers, Sa ́nchez, 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. SA ́ NCHEZ. 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 

2 

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:] 

3 


HR4044-1.eps
4 


HR4044-2.eps
5 


HR4044-3.eps
6 

Ms. SA ́ NCHEZ. 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 hardpressed 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 fulVerDate Aug 31 2005 15:24 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 H:\WORK\COMM\040108\41581.000 HJUD1 PsN: 41581
7 

fill, 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. SA ́ NCHEZ. 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 

8 

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. SA ́ NCHEZ. 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. 

9 

TESTIMONY OF THE HONORABLE JANICE SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you very much, Chairwoman Sa ́nchez, 

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 reVerDate Aug 31 2005 15:24 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 H:\WORK\COMM\040108\41581.000 HJUD1 PsN: 41581
10 

cently 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. SA ́ NCHEZ. 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


Mackey.eps
11 


Sawyer-1.eps
12 


Sawyer-2.eps
13 

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:] 

14 

PREPARED STATEMENT OF THE HONORABLE JANICE D. SCHAKOWSKY, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS


JS-1.eps
15 


JS-2.eps
16 


JS-3.eps
17 

Ms. SA ́ NCHEZ. 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 Sa ́nchez, 

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 cosponsorship 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. 

18 

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:] 

19 

PREPARED STATEMENT OF THE HONORABLE DANA ROHRABACHER, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA


DR.eps
20 

Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. Does the gentleman yield back his time? 

Mr. ROHRABACHER. Thank you for that analysis. I appreciate 

that. 

Ms. SA ́ NCHEZ. 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. 

21 

Ms. SA ́ NCHEZ. The gentleman yields back the balance of his time. 

Any other Members seek to be recognized? 

Mr. DELAHUNT. Madam Chair? 

Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. 

22 

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. SA ́ NCHEZ. Will the gentleman yield? 

Mr. KELLER. Sure. 

Ms. SA ́ NCHEZ. 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. 

23 

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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. 

24 

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. SA ́ NCHEZ. The gentleman yields back his time. 

Does the gentleman—— 

Mr. FRANKS. Let me indulge to just ask one very brief question. 

Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. The gentlemen—— 

25 

Mr. FEENEY. And I yield—— 

Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. Without objection, so ordered. 

[The prepared statement of Chairman Conyers follows:] 

26 

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


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Mr. JOHNSON. Thank you. I yield back. 

Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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 

31 

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. SA ́ NCHEZ. Pardon me, Mr. Kelley. Is your microphone on? 

Mr. KELLEY. Yes, ma’am. 

Ms. SA ́ NCHEZ. Can you move that a little bit closer? 

Mr. KELLEY. Is this better? 

Ms. SA ́ NCHEZ. 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 

32 

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 parttime 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:] 

33 

PREPARED STATEMENT OF RAYMOND C. KELLEY


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Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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-inResidence. 

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. 

39 

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:] 

40 

PREPARED STATEMENT OF JACK F. WILLIAMS


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Ms. SA ́ NCHEZ. 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 Sa ́nchez 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 

50 

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:] 

51 

PREPARED STATEMENT OF EDWARD C. BOLTZ


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Ms. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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? 

56 

Mr. BOLTZ. Chairwoman Sa ́nchez, 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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—— 

57 

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 

58 

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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. SA ́ NCHEZ. 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. 

59 

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. 

60 

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. SA ́ NCHEZ. 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? 

61 

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. SA ́ NCHEZ. 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. 

62 

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. SA ́ NCHEZ. Any takers? 

Mr. WATT. In that case, I yield back. 

Ms. SA ́ NCHEZ. 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.] 

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ANSWERS TO POST-HEARING QUESTIONS FROM THE HONORABLE JANICE SCHAKOWSKY, 

A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS


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