Bush Eager To Sign Bankruptcy Bill

President Bush will sign into law compromise legislation overhauling the nation's bankruptcy laws, the White House said on Friday.

The measure, which was backed by credit card companies and other lenders, will make it much tougher to avoid paying debts by declaring bankruptcy.

"The president looks forward to signing that. That bill enjoys widespread bipartisan support for good reasons," said White House spokesman Ari Fleischer.

On Thursday, congressional negotiators broke a months-long deadlock over the bill.

Lawmakers have been wrestling with the legislation since 1997. The bill got a big push forward in April after members of Congress compromised on how much home equity a debtor could shield in states that currently allow unlimited protection.

"In these hard economic times, while we're dealing with corporate responsibility, we should also address personal responsibility," said GOP Sen. Orrin Hatch of Utah said.

The legislation had been stalled all year over a Democratic demand for a provision ensuring that abortion protesters who are sued successfully may not use bankruptcy laws to avoid payment. But with the new agreement, lawmakers planned to put the bill on the fast track before going home for the summer.

How quickly it would move through the Democratic-controlled Senate was uncertain, but "we have worked hard for a year to make this a better and more balanced bill, and we have succeeded," said Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee.

The legislation applies a new standard for determining whether people filing for bankruptcy should be forced to repay debts under court-approved reorganization plans rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25 percent of the debt over five years or has at least the median income for his or her state, a reorganization plan generally would be required.

Under the current system, it is usually left to a bankruptcy judge or a private attorney appointed by the Justice Department to decide whether someone qualifies for dissolution of debts or should be forced to repay under a reorganization plan.

The credit card industry, which claims millions of dollars in losses a year from bankrupt consumers, has long lobbied for changes in the bankruptcy laws.

"At long last, we'll be able to close loopholes exploited by big spenders who have the ability to repay their debts and better protect consumers who have been left to pay higher prices for goods and services as a result," said Sen. Charles Grassley, R-Iowa.

Opponents charged that, particularly in a sagging economy, the measure would remove a crucial safety net for people who have lost their jobs or face huge medical bills, as well as for single mothers seeking child support from bankrupt fathers.

Sen. Paul Wellstone, D-Minn., one of its leading opponents, likely will try to stop the bill by saying tens of thousands of people have lost their retirement savings and jobs since the Enron Corp. and WorldCom Inc., accounting scandals became public.

"This bill is a dastardly one for consumers, especially in these economic times," Wellstone spokeswoman Allison Dobson said. "It should be embarrassing for people to vote for this."

The provision holding up the bill was targeted at violent abortion protesters. It would prohibit people who attack or block access to abortion clinics from declaring bankruptcy to avoid paying court-ordered fines.

A GOP aide, speaking on condition of anonymity, said Republicans succeeded in limiting the provision to only people who intentionally or knowingly violate the law.