WASHINGTON -- Although progress has slowed on bankruptcy reform, bankers are still hopeful that they will see some results this year after the crime bill passes.

The Senate has already passed a bill, sponsored by Sen. Howell Heflin, D-Ala., that lenders say would help them considerably in dealing with debtors.

Rep. Mike Synar, D-Okla. has introduced similar legislation in the House, and hopes are high that House Judiciary Committee Chairman Jack Brooks, D-Tex. will hold a hearing towards the end of this month.

ABA Lobbyist Optimistic

Edward L. Yingling, chief lobbyist for the American Bankers Association, expressed optimism that the bankruptcy bill will pass this year.

Rep. Brooks "has been very busy this year," he said. "But you have to believe he is very sincere about moving a bill this year."

Still, Mr. Yingling said he may begin to worry, "if, in a couple of weeks, there's no movement."

With the health care reform debate and the crime bill, Congress has "bigger fish to fry," according to Andy Harkey, director of legislative affairs at the American Financial Services Association. "But we're better shape this Congress than last one when we ran out of time."

Expedited Procedure Possible

There is a "good chance" that the bill could be placed on the suspension calendar - an expedited procedure reserved for noncontroversial measures - by the August break, Mr. Harkey said.

The Senate bill attempts to make it more difficult for individuals and businesses to use bankruptcy proceedings to avoid repaying debts.

The Senate streamlined parts of Chapter 11 of the bankruptcy code, making bankruptcy proceedings less expensive for all parties involved. The bill would also increase the ceiling on personal debts for Chapter 11 filings from $350,000 to $1 million, making court-approved repayment. plans available to more people.

Exemption for Taxes

Debtors would be barred from discharging debts incurred for the purpose of paying taxes, and the bill would also prohibit "cram-downs," in which the principal amount of a mortgage is reduced in value.

If the House acts as quickly as it did in 1992, the last time he considered bankruptcy reform, floor action could come soon.

"They moved from hearings to a markup to the floor in little more than a month," said Jay Harris, a lobbyist for Savings and Community Bankers of America. The financial services association said bankruptcy filings by consumers increased 181% in the last decade.

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