In their zeal to promote bankruptcy reform legislation, bankers and their consumer lending allies have dumped a flood of supporting documentation on Capitol Hill.

They may have muddied the waters more than anything else. Their avalanche of research reports mainly aims to prove that most debtors can repay more than they have been required to. But the various studies reach differing conclusions about the costs of an allegedly out-of-control bankruptcy system, and about the problems' root causes.

Then there is a whole other group of researchers, academics, and consumer advocates who broadly dismiss the industry studies and resist their allegedly anti-consumer goals. These critics claim they are fighting an uphill battle against deep-pocketed lobbyists, but they have found a way to push plenty of their own paper.

Where the actual votes will be cast, the battle has become highly partisan. The Republican majority in the House of Representatives wants to get a bill to the House floor by May. A persistent group of bankruptcy experts opposing the industry-supported legislation wants Congress to slow down and study the issues more carefully.

It is shaping up as a classic battle between power blocs, moving at a rapid pace and with an outcome difficult to predict.

"Can we do the kind of due diligence that we ought to do, given the time frame of the majority?" asked David Lachmann, a spokesman for Rep. Jerrold Nadler, D-N.Y.

"My sense is that the independent research is having no impact and the only studies that count are the ones accompanied by a press release," said Elizabeth Warren, a Harvard Law School professor.

"If you are unable to reduce your study to a sound bite, it won't have much influence on the debate," said Ms. Warren, who was adviser to the Bankruptcy Review Commission and a strong voice on the self-styled consumer-friendly side.

As they pore through the daunting pros and cons, legislative staffers like Mr. Lachmann are finding it nearly impossible to sort fact from exaggeration. "Are we making policy on good, sound research, or industry fluff? We don't know," said Mr. Lachmann.

In February, Rep. Nadler introduced HR 3146, which is considered the most "consumer-friendly" of the reform proposals. The New Yorker is trying to organize a bipartisan request to the General Accounting Office to evaluate some of the newer industry and independent studies. Rep. Nadler is planning to make the request regardless of whether he gets Republicans to go along with him.

Two other bills that take more of an industry position are pending. HR 3150, introduced in February by Rep. George W. Gekas, essentially embraces the view that bankruptcy is enabling too many people to weasel out of debts they can repay. It has some 30 co-sponsors and is the principal piece of legislation the House is considering.

Rep. Gekas' bill was born out of HR 2500, introduced in September by Rep. William McCollum, R-Fla., which had 150 supporters. HR 3150 essentially includes most of Rep. McCollum's provisions, plus a few more seen as especially favorable to lenders.

MasterCard International and Visa U.S.A. have gotten behind the Gekas bill. According to a study commissioned by the Bankruptcy Industry Council, bankruptcy cost credit card lenders $11 billion in 1997 alone. All unsecured lenders suffered estimated losses of $35 billion.

The credit industry's full-court press may be falling short in credibility. Some lawmakers question whether the "needs-based reform" in the McCollum and Gekas bills is warranted. The measures would create a formula for determining whether bankruptcy filers could discharge their debts in Chapter 7 or would have to repay them in Chapter 13.

Rep. Gekas, chairman of the House Judiciary Committee's commercial and administrative law subcommittee, is holding firm.

The industry-sponsored studies "speak for themselves," he said in an interview. He rejected Rep. Nadler's suggestion for a further GAO review of research.

Some bankruptcy experts worry that Rep. Gekas' attitude will result in hastily made legislation. Markup of the Gekas bill is scheduled for April 24, probably too soon for the GAO to weigh in on the latest data.

Rep. Gekas said the industry-sponsored reports are "given a lot of weight, particularly since they seem to substantiate each other." But consumer advocates and academics say they are easily shot down.

"One would have to be incredibly naive to take the industry-funded consulting reports very seriously," said Lawrence M. Ausubel, professor of economics at the University of Maryland at College Park. "Their conclusions were pre-determined at the start."

Mr. Ausubel presented research to Congress this month that attributed the record level of bankruptcies to the record level of consumer debt. He said the household debt is a function of aggressive lending tactics through which banks and others are reaping tremendous profits.

The war of the studies reaches back to 1996, when Visa and MasterCard backed a piece of work by the Credit Research Center, "Personal Bankruptcy: A Report on Petitioners' Ability to Pay."

The Credit Research Center, now affiliated with Georgetown University in Washington but then with Purdue University in Indiana, concluded that 25% of debtors who filed for Chapter 7 could repay 30% or more of their nonhousing debts.

The report became the basis for lenders' claims that the records in bankruptcy filings-1.3 million in 1997-could be ascribed to a system that is too lenient with borrowers.

Consumer advocates and bankruptcy lawyers immediately questioned the methodology. "Those of us who practice in the field knew inherently that it was wrong," said Norma L. Hammes, president of the Association of Consumer Bankruptcy Attorneys.

Congress asked the GAO to examine the study; the agency returned a conclusion in January that the research, led by management professor Michael Staten, was a "good starting point" but flawed.

Among the GAO's objections was that the Credit Research Center had not done a national population study. It also relied on bankruptcy filers' own estimates of income, expenses, and debts to project how much they could repay over five years. The GAO said this information is unreliable.

"People don't know how much they spend on things, and often the tendency is to underestimate expenses," Ms. Hammes said.

Joseph Guzinski of the Justice Department's U.S. Trustees office, which administers the bankruptcy system, concurred. "We find generally that there are errors in petitions," he said.

Ms. Warren of Harvard Law School said the bankruptcy files that the industry studies depended on contain too little information to draw accurate conclusions.

"Debtors in the '90s are worse off than their counterparts in the '80s," said Ms. Warren, who is widely published in the field. Her most recent work focuses on how much faster debt is rising compared to income.

Even before the GAO evaluation of Mr. Staten's study, enough questions had been raised for the lenders to commission new work.

Last fall, the Bankruptcy Issues Council- Visa, MasterCard, Chase Manhattan Corp., Citicorp, MBNA Corp., and other major credit card issuers- turned to the economic forecasting firm WEFA Inc. It found that Rep. Gekas' HR 3150 would save creditors $29.5 billion over three years and $3.6 billion to $7.4 billion in 1997 alone.

Simultaneously, the Bankruptcy Issues Council asked Ernst & Young to conduct research. The accounting and consulting firm produced two studies this month, both meant to answer the GAO's concerns over Mr. Staten's work.

One study, based on a national sample of bankruptcy filers in 1997, said 15% of those in Chapter 7-nearly 150,000 people-would have been required to file a Chapter 13 repayment plan if a needs-based provision were in effect. This would have saved lenders $4 billion last year.

However, like the Credit Research Center study, the Ernst & Young report relied on consumers' estimates of income, expenses, and debts. After looking at the Ernst & Young reports, the GAO said "it is prudent to interpret the findings and conclusions with caution." (The GAO did not look at the WEFA study.)

Thomas S. Neubig, director of Ernst & Young's policy economics and analysis group, defended its use of the consumer-provided data, saying there is no other source for such information.

"GAO's alternative is to audit" all bankruptcy filings, Mr. Neubig said.

Consumer groups, which largely cite anecdotal evidence to support their position that bankruptcy filers desperately need and deserve relief, concede there is abuse-but much less than the banking industry wants legislators to believe.

The National Consumer Law Center in Boston estimates just 5% of those who file for Chapter 7 can afford to pay something back.

Rep. Gekas said there is a more convincing argument for bankruptcy reform in the number of people who filed for relief last year amid a strong economy. "We are trying to arrest an immediate problem," the congressman said.

Mr. Guzinski of the United States Trustees said the industry studies have "enough credibility" to warrant further scrutiny-but not enough to form the basis of legislation.

The banking industry has "clearly raised the issue (that there are) people out there who could pay something back," Mr. Guzinski said. "The big issue for us is the cost associated with identifying the cases in which there is something to pay back. We will have to spend time figuring out those cases. Nobody has put a price tag on that."

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