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Consumer Bankruptcy Reform: Proposals Before the 105th Congress

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Publication Date: March 1998

Publisher(s): Library of Congress. Congressional Research Service

Series: 98-276

Topic: Banking and finance (Personal finance and saving)


This report examines several proposals for consumer bankruptcy reform which have been introduced in the 105th Congress. In 1997, two bills — H.R. 2500 and S. 1301 — were introduced that would dramatically change the manner in which consumer bankruptcies are administered under the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq. On February 3, 1998, a successor bill to H.R. 2500 was introduced — H.R. 3150. This bill is far broader in scope and addresses many aspects of bankruptcy practice in addition to consumer reform.

To achieve this goal, these bills would require certain debtors to pledge future wages or income towards debt repayment under a chapter 13 consumer reorganization rather than having the option of liquidating under chapter 7.

H.R. 3146, entitled the “Consumer Lenders and Borrowers Bankruptcy Accountability Act of 1998,” was introduced on February 3, 1998. It takes a different approach to amending chapter 13. It would focus on creditor lending practices, particularly those of credit card lenders, by making it more difficult for unsecured lenders to collect certain debts under chapter 13. It also contains measures designed to prevent abusive chapter 7 filings by consumer debtors.