Bankruptcy Bill Advances.

The House has passed a consumer bankruptcy bill by a 308-108 vote and the Senate is also expected to pass it, despite efforts of several Democratic senators to knock it off track.

The House basically rubber-stamped the bankruptcy bill that Congress passed last year and President Bill Clinton vetoed. This year, President George W. Bush is sitting in the White House and he is expected to sign the bill into law.

The President's economic advisor Lawrence Lindsay told a consumer group March 9 that the "President has said he will sign it and supports passage."

Passage of a bankruptcy bill is a top priority of the credit card industry because it would make it more difficult for borrowers to get unsecured loans discharged in bankruptcy.

There also are provisions in the bill that would help mortgage servicers. One provision would make it more difficult for delinquent homeowners to employ multiple bankruptcy filings as a tactic to delay foreclosure.

Another provision would allow expedited processing of all single asset bankruptcies involving commercial buildings. Currently, expedited processing for single asset bankruptcies is available only when the lender has a claim of $4 million or less.

The House and Senate bills also make it plain that bankruptcy judges do not have the authority to reduce or "cram down" the amount of a residential mortgage to the current market price of the property.