JULY 1998

House backs bankruptcy reform

The U.S. House of Representatives has taken an important step toward bankruptcy reform.

The House approved the Bankruptcy Reform Act of 1998, 308-16. This bill would force higher-income bankruptcy filers who can repay some of their debts to do so. It would also ensure that debtors in direst straits would still get complete debt relief and a fresh start.

Research has indicated that this measure could help recover more than $3 billion a year. The bill also includes provisions to ensure that filers know about alternatives to bankruptcy such as credit counseling.

The bill would also elevate child support and alimony payments to top priority in a bankruptcy proceeding -- obliging debtors to pay this type of debt before any other.

The Business Council worked with the New York Bankers Association, the Retail Council and local chambers of commerce to encourage passage. The group is now reaching out to Senators Moynihan and D'Amato to urge passage of the Senate's version of the bill.

July 9, 1998