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Bush Reform

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With Clinton out and Bush in, lawmakers are holding hearings this week to make a second run at passing bankruptcy reform legislation. The legislation was introduced this week in the Senate by Finance Committee Chairman Charles Grassley (R-I) and in the House by Congressman George Gekas (R-PA). The bankruptcy measures previously passed both houses of Congress in each of the last two terms, only to be vetoed by President Clinton. The White House indicated that Clinton had problems with two provisions of the 420-page bill, one that permits wealthy bankruptcy filers to keep their homes and another that allows violent demonstrators at abortion clinics to use the bankruptcy laws to discharge fines and damages. In general, the proposed legislation makes it harder for consumers to file for Chapter 7 when there is some ability to repay debts. Many consumers will be forced into a Chapter 13 debt repayment plan under the proposed legislation. It is very likely President Bush will sign the legislation if it successfully passes through Congress.

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