What’s at stake: The law tries to cut down on bankruptcies by making the whole process more complicated. It increases paperwork and requires consumers to get credit counseling. Debtors who can repay at least 25 percent of their debts over five years or who earn more than their state’s median family income–usually about $50,000–will be forced to file Chapter 13, which requires some debt repayment, rather than Chapter 7, which pretty much wipes the slate clean. Another measure would give child support and alimony top priority for repayment if you’ve been delinquent. And credit-card companies will have to disclose on their bills how much consumers will end up paying if they make only the minimum payments.
Who backed the plan: Lenders and credit-card companies.
What you can do: Once signed by Bush, the law won’t take effect for six months, so if you’re considering filing for bankruptcy, call a lawyer now.
