A Visa executive urged Congress Thursday to make it more difficult for people to escape their debts by filing for bankruptcy.

"An increasing number of people appear to choose bankruptcy as the solution to their financial difficulties rather than as a last resort," said Kenneth Crone, vice president of Visa U.S.A.'s risk management and security division. "The Bankruptcy Code ... allows debtors to obtain more protection than they need."

The Visa executive was among 10 industry representatives, regulators, and bankruptcy specialists testifying at a House Banking Committee hearing on consumer loan delinquencies.

Mr. Crone argued that unless Congress legislates to curb the rate of bankruptcies banks will be forced to restrict how much credit they offer. Congress should change the Bankruptcy Code to force debtors with high incomes to pay some portion of their debts, he said.

Personal bankruptcies hit a record one million in the 12 months ended June 30, he noted.

Currently, people may file under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 13 debtors may keep assets such as their cars and home but must eventually repay their creditors. In Chapter 7, debtors keep fewer assets but are absolved of all debts, including credit card bills.

Unsecured creditors, such as credit card issuers, complain that many debtors choose Chapter 7 even though they could file under Chapter 13.

Regulators and lawmakers at the hearing also voiced concern about personal bankruptcies. Federal Deposit Insurance Corp. Chairman Ricki Helfer estimated that bankruptcies account for as much as 50% of the losses banks are reporting in their credit card portfolios.

Federal Reserve Governor Lawrence B. Lindsey said a strong economy has given consumers the confidence to incur more debt. He noted that, since 1991, people have been spending $1.10 for every $1 their income has increased.

Rep. John J. LaFalce, D-N.Y., said he would introduce a bill next week to prevent consumers from buying casino betting chips or slot machine tokens with credit cards.

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