WASHINGTON -- President Bush signed the biggest rewrite of US bankruptcy law in a quarter-century yesterday, making it harder for debt-ridden Americans to wipe out their obligations.
''Bankruptcy should always be a last resort in our legal system," Bush said. ''If someone does not pay his or her debts, the rest of society ends up paying them."
Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law, which will go into effect in six months. The legislation won final congressional approval last week after being touted for eight years by banks and credit card firms.
The measure would require people with incomes above a certain level to pay some or all of their credit-card charges, medical bills, and other obligations under a court-ordered bankruptcy plan.
Bush said the new law makes the financial system fairer for debtors and creditors.
''The act of Congress I sign today will protect those who legitimately need help," Bush said.
Those who fought the bill said the change will fall especially hard on low-income workers, single mothers, minorities, and the elderly and will remove a safety net for those who have lost their jobs or face hefty medical bills.