House Ballot Expected Today On Its Bankruptcy Reform Bill

The House is expected to vote today on a sweeping bill that would make it tougher for consumers with high disposable incomes to eliminate unsecured debts in bankruptcy.

The bill was expected to be cleared Tuesday by the Rules Committee, which spent most of the day taking testimony on the bill. However, debate on 36 amendments had not begun by late afternoon. The committee was expected to clear about a dozen of those proposed changes for consideration by the full House.

On Monday, America's Community Bankers sent a letter to each member of the Rules Committee, urging them to limit the number of amendments so the bill would not take too long to debate on the House floor.

"Such a rule would preserve the integrity of the debate with respect to bankruptcy reform and enhance the chance of final passage of this significant legislation in the 106th Congress," wrote Robert R. Davis, the ACB's director of government relations.

The Senate is supposed to debate its competing reform bill next month. It would require consumers to use Chapter 13 if they could afford after living expenses to repay at least $15,000 in unsecured debt over five years.

The Senate debate is expected to become highly partisan. In a first shot, Democrats introduced a version of bankruptcy reform late Monday that cleared the Senate last year 97 to 1. That bill would require judges to force consumers into Chapter 13 if they could afford after living expenses to repay 30% of unsecured debt over three years. It also requires enhanced credit card disclosures and bars creditors who violate the Truth-in-Lending Act from collecting debts in bankruptcy.