WASHINGTON - Key lawmakers are expected to revive the fight for bankruptcy reform legislation by introducing bills as early as today in the House and Senate.
The measure, long sought by the financial services industry, could be ready for debate in the Senate as early as next week, Senate majority leader Trent Lott said.
"I don't see any reason why we can't have a final product ready for President Bush to sign by the summer," said Philip S. Corwin, a partner in the lobbying firm of Butera & Andrews.
Sen. Charles E. Grassley, R-Iowa, and Rep. George W. Gekas, R-Pa., plan to reintroduce legislation that is substantively identical to a compromise bill the House and Senate passed by veto-proof majorities last year. The measure died in December when President Clinton left it unsigned. Lawmakers had adjourned for the year and thus were unable to try to override the so-called pocket veto.
A spokesman for Rep. Gekas said that President Bush, though he has not officially endorsed bankruptcy reform, is expected to support the measure.
Mirroring the compromise that the Senate adopted Dec. 7 and the House passed on Oct. 12, the new legislation is intended to relieve creditors from having to shoulder most of the filers' debt by creating a means test that would require those with higher incomes to repay more.
The means test would push more bankruptcy filers into Chapter 13 payment plans - which require most or all of debt to be repaid - instead of having their debts eliminated under Chapter 7 of the Bankruptcy Code. For example, judges could force debtors into Chapter 13 if they could afford to repay the lesser of $10,000 or 25% of unsecured debt over five years.
But the bill will face many obstacles, including opposition by some Democrats and attempts by various interests to add amendments.
Industry officials are expected to fight changes to the Grassley and Gekas legislation.
"The current bill is at the limits of acceptability for much of the industry," Jeffrey A. Tassey, a partner in the Williams & Jensen PC law firm, wrote Monday in a memo to a coalition of lobbyists supporting bankruptcy reform.
Senate Banking Committee Chairman Phil Gramm has said he would push his own version, especially if attempts are made to limit the activities of financial services companies such as credit card issuers. However, his spokeswoman emphasized that "if the intent is to bring up last year's bill and take it to the floor without a hearing, there would not be time" for action by Senate Banking.
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