Bankruptcy Bill at a Glance

Highlights of bankruptcy legislation approved Thursday by the Senate and sent to President Clinton: <br><br>â€”Applies a new standard for determining whether people filing for bankruptcy should be forced

Thursday, December 7th 2000, 12:00 am

By: News On 6

Highlights of bankruptcy legislation approved Thursday by the Senate and sent to President Clinton:

â€”Applies a 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.

â€”Limits repeat bankruptcy filings.

â€”Requires credit card companies to explain to customers in their monthly statements how long it would take to pay off balances if they make only the minimum required payments. Bill statements also would include a toll-free phone number for customers to get information on how long it would take them, personally, to pay off their balances.

â€”When low-interest, introductory ``teaser'' rates on credit cards are used to lure new customers, they would have to be told when the higher rates will take effect and what they will be.

â€”Gives highest priority among debts to child support payments, putting them ahead of credit card debt and other obligations.

â€”Protects quality of care for hospital and nursing home patients when the health care facilities file for bankruptcy protection.

â€”Expands farmers' eligibility for bankruptcy protection and makes the federal government last on the list of creditors when farmers sell farm assets to raise money to pay debts.

â€”Imposes a $100,000 federal cap on homestead exemptions for home equity acquired within two years of filing for bankruptcy protection, in an effort to prevent wealthy debtors from shielding their assets in luxury homes in bankruptcy proceedings. It also requires that people establish residency in a state two years before filing for bankruptcy protection in order to claim that state's homestead exemption.

Florida and Texas allow unlimited homestead exemptions, which debtors can use to keep their homes' value from being counted among their assets in bankruptcy proceedings.