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A Sudden Rush to Declare Bankruptcy Is Expected By PHILIP SHENON

WASHINGTON, July 26 The compromise bill, which was approved on Thursday by Congressional negotiators and is expected to be adopted in both the House and Senate by the end of next week, will make it much harder for Americans to wipe out their debts when they declare bankruptcy.

After the agreement, lawyers around the country said that they had begun to receive calls and visits from debtors worried that they needed to file bankruptcy before the old rules lapse next year.

“I’ve had plenty of calls this morning,” said Gary F. Weltmann, a consumer bankruptcy lawyer in Washington. “And I’m telling people that they need to take action now.”

Marty K. Courson, a bankruptcy lawyer in San Francisco, said he was “getting ready for the onslaught.”

“I do think there will be a lot of people trying to use the old rules,” he said.

The White House announced today that President Bush would sign the bill, which was scheduled for a final vote in the House late tonight and in the Senate next week.

“The president looks forward to signing that,” said Ari Fleischer, the White House spokesman. “That bill enjoys widespread bipartisan support for good reasons.”

The bill, which had been stalled until this week in a House-Senate conference committee, passed both chambers by overwhelming margins more than a year ago. The conference committee approved the bill Thursday after agreeing on an abortion-rights provision that had been the final obstacle to passage; the provision will bar anti-abortion protesters from using the bankruptcy laws to avoid paying court judgments as a result of clinic protests.

The bill has long been the top legislative priority of the credit card and banking industries, which say that many people now abuse the bankruptcy system by writing off debts that they should be able to pay. There were 1.45 million bankruptcy filings last year, a record, up 19 percent from 2000.

“This legislation restores integrity and accountability to our bankruptcy system by offering a fresh start to those who deserve one while cracking down on those who don’t,” said Representative F. James Sensenbrenner Jr., the Wisconsin Republican who is chairman of the House Judiciary Committee.

Critics, including top consumer-rights groups, described the bill as a gift to lenders in exchange for a recent, drastic increase in campaign contributions to members of Congress. They also said that it would do harm to millions of Americans in financial distress as a result of lost jobs, poor health or divorce.

The bill’s opponents have also questioned the timing of its passage, which comes in the midst of a Congressional crackdown on abusive accounting practices by many of the largest companies, including some of the same financial services companies that have lobbied strenuously for the bankruptcy bill.

“The timing couldn’t be worse,” said Travis B. Plunkett, the legislative director of the Consumer Federation of America. “It takes a lot of gall for Congress to make a move like this when so many Americans are concerned about corporate abuses, and when the economy is so shaky.”

Senator Paul Wellstone, a Minnesota Democrat who is a leading critic of the bill, said today that “it boggles the mind that at a time when Americans are more economically vulnerable, when they are most in need of protection from financial disaster, we would eviscerate the major financial safety net in our society for the middle class.”

Bankruptcy lawyers said that the bill would do harm to low- and middle-income clients who would be saddled with debts that would take them years to pay back. The new law will end the debt-free “fresh start” that many of those debtors had been permitted under the current law.

Recent studies have shown that the average American filing for bankruptcy has a median household income well below the national average of about $42,000 in 2000. A study cited in Congressional testimony last year showed that the average person filing for bankruptcy had a car that was six to nine years old, and that a quarter of those people had medical debts exceeding $1,000.

“I won’t deny that there are people who abuse the bankruptcy system,” said Mr. Weltmann, the Washington lawyer whose firm calls itself the Bankruptcy Center. “But there are honest, hard-working folks who are really going to be affected by these changes.”

The bill would impose a means test on debtors, based on median incomes in their home states, for bankruptcy filings under Charter 7 of the federal bankruptcy law, which permits debtors to erase most of their unsecured debts, like credit card bills.

Debtors with an income above the state median would be barred from filing under Chapter 7 and would instead be required to file instead under Chapter 13, which requires that a portion of the unsecured debt be repaid over time under the court-administered plan.

Mr. Courson, the San Francisco lawyer, said that the changes would “hurt a lot of consumer debtors who really, rightfully belong in Chapter 7.”

“My clients, for the most part, are honest and unfortunate people, and they’ve just got heavy debt,” he said. “You can always find some circumstance where a person really went to town with a credit card and got themselves in trouble. But I have people who are just plain old poor. My experience is something wildly different than the story that the credit card companies make to Congress.”

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