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Wednesday, April 20, 2005

CBS 46 Atlanta - Bush to Sign Rewrite of Bankruptcy Code

CBS 46 Atlanta - Bush to Sign Rewrite of Bankruptcy Code: "Washington
Bush to Sign Rewrite of Bankruptcy Code
Apr 20, 2005, 10:13 AM

WASHINGTON (AP) -- Americans weighed down by credit card bills and other financial obligations will have a harder time wiping out their debt under a bankruptcy bill President Bush is poised to sign.

46 FORUM: Your thoughts on this change?

Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law, which will go into effect six months after Bush signs it Wednesday. The legislation is the biggest rewrite of the bankruptcy code in a quarter-century and was pushed for eight years by banks and credit card companies.

The measure would require people with incomes above a certain level to pay some or all of their credit-card charges, medical bills and other obligations under a court-ordered bankruptcy plan.

Those who fought the bill's passage said the change will fall especially hard on low-income working people, single mothers, minorities and the elderly and would remove a safety net for those who have lost their jobs or face crushing medical bills.

The financial services industry argued that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.

The bill got final congressional approval last Thursday, and Bush said he was eager to sign it. 'These commonsense reforms will make the system stronger and better so that more Americans - especially lower-income Americans - have greater access to credit,' he said.

New personal bankruptcy filings edged down from 1,613,097 in the year ending June 30, 2003, to 1,599,986 in the year ending last June 30, breaking an upward trend of recent years.

Between 30,000 and 210,000 people - from 3.5 percent to 20 "

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