House Passes Bankruptcy Bill

The bankruptcy bill passed in the House of Representatives yesterday by a 302-126 vote.

Congressional approval of the bill was much expected this session, especially after the bill passed in the Senate last month by a 74-25 vote. The bill has come up but failed to pass in previous sessions largely due to a controversial abortion-related amendment that was not included in this bill this session. While largely a republican-supported bill, it has also gained the support of many democrats. Seventy-three democrats from the House voted for the bill.

The bill will make significant changes to our bankruptcy system, many people will be unable to completely discharge their debts under Chapter 7. Instead, individuals will be subject to a means test. Those with incomes above their state’s median will have to enter into a repayment plan under chapter 13. Opponents of the bill feel that it will punish consumers while aiding the credit industry.

President Bush has long been a supporter of the bill. Shortly after the House passed the bill President Bush stated, "I look forward to signing the bill into law." It may be presented to President Bush as early as next week.