In what was largely seen as a reward for financial corporations supporting President Bush’s reelection effort, the US House of Representatives passed a bankruptcy bill on Thursday that will make it harder for Americans to declare bankruptcy and have a portion of their debt forgiven. Under the new guidelines, most people filing bankruptcy will be forced to do so under Chapter 13, requiring them to adhere to long-term court-ordered payment plans that will make it harder to escape debt. While the credit card industry lobbied heavily for the bill claiming that bankruptcy fraud costs consumers hundreds of dollars in extra fees each year, critics of the bill point out that half of all bankruptcy filings are the result of excessive medical bills–not abuse of the law. The bankruptcy bill has been sought by the financial industry for the past decade, with the industry giving some $43 million since 1989 in lobbying efforts.
The bill passed the House 302-126 and passed the Senate 75-26. President Bush is expected to sign the bill and it will likely go into effect six months after it is signed. Michigan Congresswoman Debbie Stabenow, a Democrat, voted for the bill in the Senate while the remainder of Michigan’s Democratic legislators voted against the bill.
