Robert F. Elliot, vice chairman of Household International Inc., urged lawmakers Wednesday to support legislation that would prevent wealthy borrowers from wiping out their debts in bankruptcy.

In testimony before a Senate Judiciary subcommittee, Mr. Elliot said that only debtors who cannot repay their bills should be permitted to file for Chapter 7 bankruptcy.

Sens. Charles Grassley, R-Iowa, and Richard J. Durbin, D-Ill., have sponsored a bill that would ensure greater scrutiny of filers' finances.

Representing the American Financial Services Association, Mr. Elliot said needs-based bankruptcy reform is justified, because 15% of those who file under Chapter 7 have "some substantial capacity to repay."

"Convenience bankruptcy is a product of an entitlement philosophy, which has transcended a more just, needs-based philosophy," Mr. Elliott said.

He said the finance industry has tightened its credit policies and set up education and counseling programs for borrowers to curb bankruptcies, which are at record highs.

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