Republicans Push Bill on Bankruptcy Overhaul

Legislation to make it harder for consumers to walk away from credit card and other unsecured debt may come to a vote in the U.S. Senate next week, according to a Republican leader.

Senate Majority Leader Trent Lott of Mississippi told Republicans on Tuesday that the bankruptcy overhaul will be among the first bills the upper house will vote on this year, according to Senate Republican Conference Chairman Larry E. Craig of Idaho.

“There is a desire to move that quickly,” Craig said.

Sponsors in both the House and Senate have said they plan to introduce legislation this week that mirrors a bill President Clinton vetoed last year.

MasterCard International Inc., Citigroup Inc., and other creditors, as well as retailers such as J.C. Penney Co., have pushed to undo concessions Republicans made late last year to try to win Clinton’s support.

Senate Banking Committee Chairman Phil Gramm (R-Texas) said he wants to reopen the legislation to make changes to parts of the bill that would require greater disclosures to borrowers. Gramm, however, is reconsidering his position and would be willing to forgo the banking panel’s right to take up a new version “as long as it’s last year’s bill,” said Gramm spokeswoman Christi Harlan.

“On a schedule that tight, the Banking Committee won’t have time for a markup,” Harlan said.

The main part of the legislation would make debtors with incomes sufficient to pay 25% of their unsecured debt ineligible in most cases for Chapter 7 bankruptcy, which allows individuals to walk away from their debts. It would exempt debtors whose incomes are less than the state median income.

Rep. George W. Gekas (R-Pa.) will introduce the bankruptcy legislation in the House today, said spokesman Kent Wissenger.