Mexico Sen. OKs Bankruptcy Reform
MEXICO CITY (AP) _ In a move that analysts say will help end Mexico’s 5-year-old domestic credit drought, the Senate approved Thursday a lower house bill to reform antiquated bankruptcy laws that banks said prevented new lending.
The new bankruptcy law replaces a 1940s code that allowed businesses to delay payments to creditors for years, with no interest-rate penalty for missed payments.
The new code, already approved by the Chamber of Deputies, will go into effect later this year. Mexican banks, citing legal problems in collecting on debts, have offered few new loans to businesses and consumers here since the 1994 peso crisis.