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Following is a summary of the bankruptcy law changes that are proposed in Senate Bill 256.

Fewer People Eligible for Chapter 7 Bankruptcy

Losers: Those who want to file for Chapter 7 bankruptcy but have an above-average income and could pay a little each month, according to the IRS.

Traditionally, bankruptcy's fresh start has been available to almost everybody. The proposed law, however, prohibits some people from filing for Chapter 7 bankruptcy altogether -- those whose incomes are above the state median (quite low in some states) and who can pay as little as $100 per month to creditors. Whether or not a debtor can afford to pay $100 or more a month would be determined not by the person's actual income and expenses, but by IRS rules that state what "reasonable" expenses are.

People denied a Chapter 7 bankruptcy either have to file for Chapter 13 bankruptcy and come up with a three- to five-year repayment plan or keep slipping further behind on their debts.

This restriction is one reason many women's groups oppose the bankruptcy legislation. People who can't file for Chapter 7 bankruptcy and wipe out their credit card balances, they fear, will have less money available to pay other debts -- child support, for example.

Fewer People Able to Stick to Chapter 13 Repayment Plans

Losers: Those who want to file for Chapter 13 bankruptcy but reside where the cost of living is high.

Debtors forced into Chapter 13 bankruptcy because Chapter 7 is no longer available to them will find that the proposed law makes Chapter 13 bankruptcy more difficult. In Chapter 13 bankruptcy, debtors must put together a repayment plan, basing their payments on their income and expenses. Under the proposed law, actual expenses for many things don't matter -- debtors are allowed to claim only certain amounts for certain expenses (housing, for example), even if the actual cost is higher. Some people, especially those living in areas where the cost of living is high, will be unable to follow through with a repayment plan.

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