In two weeks of debate and a series of votes on the Senate floor and later in the House Judiciary Committee, Republicans systematically rebuffed Democrats' efforts to soften the bill with amendments.
Backers in Congress and the financial services industry have been pushing the legislation for eight years, arguing that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires - often celebrities - who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.
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Bankruptcy Protection: What is Chapter 7 and Chapter 13 bankruptcy? And how will the new bankruptcy legislation change them?
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_____In Focus: Bankruptcy_____
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Bankruptcy's Next Chapter (The Washington Post, Mar 20, 2005)
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Keeping Some Hiding Places (The Washington Post, Mar 20, 2005)
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Interest, Late Fees Tripled The Card Companies' Bill (The Washington Post, Mar 20, 2005)
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Penalties and Refusals Almost Everywhere He Turned (The Washington Post, Mar 20, 2005)
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Ulcers and Credit Piled Up Debt (The Washington Post, Mar 20, 2005)
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Mandatory Counseling, A Good Idea in Theory: Michelle Singletary says the bankruptcy counseling provision in the bankruptcy bill "is there as a roadblock. It's a setup, lobbied for by banks and credit card companies, to steer people away from bankruptcy to debt repayment plans."
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Tax Liens Complicate Bankruptcy Filings: Albert B. Crenshaw reminds readers that "[b]ankruptcy laws provide filers with protection from many kinds of creditors, but tax collectors generally are not among them."
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Friday's Question:
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New personal bankruptcy filings declined to 1,599,986 from 1,613,097 in the year ending last June 30, breaking an upward trend of recent years.
Banks, credit card issuers and retailers have lobbied vigorously for bankruptcy revisions that would force more people to repay at least part of their debt. Such a bill nearly passed in 2002. It failed when the Senate accepted, but House Republicans rejected, a Democratic amendment barring anti-abortion protesters from using bankruptcy to avoid paying court fines for blocking abortion clinics.
The bill creates a test for measuring a debtor's ability to pay.
Those with insufficient assets or income could still file a Chapter 7 bankruptcy, which if approved by a judge erases debts entirely after certain assets are forfeited. Those with income above the state's median income who can pay at least $6,000 over five years - $100 a month - would be forced into Chapter 13, where a judge would then order a repayment plan.
Critics say that's unfair because many people who file for bankruptcy have lost their jobs, or are going to lose them.
Under the current system, a federal bankruptcy judge determines under which chapter of the bankruptcy code a person falls - whether they have to repay some or all of their debt.
