And John McMickle, legal counsel to Sen. Grassley while the bill was being shaped, argues that the legislation could itself serve to educate people. And while the 1.2 million people declaring bankruptcy last year represented the second straight decrease in bankruptcy filings, down from a record 1.4 million in 1998, many analysts expect the figure to rise if the economy takes a downward turn. Steve Rhode, founder of myvesta.org, a group that aims to keep debtors from declaring bankruptcy, argues the pressure to spend means people are often in no financial position to deal with the unexpected illnesses, layoffs, or personal problems that, in turn, make them insolvent. Applies new standard for determining whether people filing for bankruptcy should be forced to repay their debts under a court-approved reorganization plan rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25 percent of the debt over five years, a reorganization plan generally would be required.
Limits repeat bankruptcy filings.
Requires debtors to participate in credit counseling programs before they file for bankruptcy court protection unless special circumstances prevent it. Credit counselors generally inform consumers about the consequences of bankruptcy, such as its potential impact on a debtor's credit rating, and provide guidance on managing finances. Gives highest priority among debts to child support payments, putting them ahead of credit card debt and other obligations. Allows public school expenses, such as sports uniforms, for a debtor's children to be considered in determining income and expenses, putting them on an equal footing with private school costs. Ends the requirement for children's names to be listed on bankruptcy applications to prevent contacts by sexual predators.