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Senate Overhauls Bankruptcy Laws, Making It Harder for People to Erase Debt

HeadlineMar 16, 2001

The Senate voted overwhelmingly yesterday to overhaul the nation’s bankruptcy laws and make it harder for people to erase their debts. The lopsided vote, 83 to 15, makes it far more likely that the federal bankruptcy code will be rewritten this year. The House has passed a similar bill, and President Bush has signaled that he will sign whatever compromise is reached by House and Senate negotiators. Support for the overhaul was largely bipartisan, with 36 Democrats joining 47 Republicans. The bill’s quick resurrection after President Bush’s inauguration was seen as evidence of the generous campaign contributions made to each party by the credit industry. It also reflected the growing power of lobbyists in a government in which the White House and Congress are run by business-friendly Republicans. For many of the more than 1 million Americans whose financial troubles are expected to force them into bankruptcy next year, the bill would end their ability to use the bankruptcy system to wipe out credit card bills and other loans that are not secured by homes or other assets.

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