Senate Passes Bankruptcy Bill

The U.S. Senate passed the bankruptcy bill in a 74-25 vote on Thursday.

Eighteen Democrats joined Republicans in passing the bill. It will move to the House of Representatives next month where it is expected to easily pass.

If the bill becomes law it will mark the biggest overhaul in our bankruptcy system in a quarter century. The bill sets up an income-based test for consumers in bankruptcy. Those with incomes above the state’s median would be required to file under chapter 13 rather than chapter 7 and repay some of their debts.

Democrats have tried to soften the bill’s impacts on groups such as the elderly, single parents, and minorities. They feel that the bill favors the credit industry at the expense of the poor. Democratic efforts to add amendments or alter the bill were unsuccessful under the Republican majority. Leaders in the House of Representatives have stated that if the bill reached the House essentially unchanged they will pass it quickly.