The nightmare lived by the Spechts and other Americans could become even more harrowing if some members of Congress have their way. For years now, a powerful coalition of banks and credit-card companies has been lobbying Congress to make it harder to file for Chapter 7 bankruptcy, which cancels personal debt, in favor of Chapter 13, which involves paying back a portion over a period of time. As the number of personal bankruptcies has surged--from approximately 718,000 in 1990 to 1.54 million in 2004--banks and credit-card companies say, they've lost billions of dollars in canceled payments.

Republicans, and some Democrats, have long been pushing a bill that would create a means test for debtors who want to file for bankruptcy, preventing anyone who makes over the median income in their home state from filing for Chapter 7, but allowing them to file for Chapter 13. The idea, proponents say, is to make debtors take better care of their money.

Although the bill has failed in years past, Iowa's GOP Senator Chuck Grassley, buoyed by Republican Congressional gains and past support from moderate Democrats like minority leader Harry Reid, recently reintroduced the legislation. "People who have the ability to repay some or all of their debt should not be able to use bankruptcy as a financial planning tool so they get out of paying their debt scot-free while honest Americans who play by the rules have to foot the bill," says Grassley's spokesperson Jill Kozeny. Kozeny also notes that medical expenses would be deductible under the means test, and that adjustments to the test would be allowed if debtors show "special circumstances."

Jim Manley, Reid's communications director, says Reid will support the legislation, which he believes will force people to "take a measure of personal responsibility" for their financial affairs. Reid and some other Democrats will insist that it contain a provision preventing abortion clinic protesters from filing for bankruptcy to avoid paying legal fines (a practice that Reid, who is antichoice, nonetheless opposes). Such a provision was added to the 2002 version of the bill in an attempt to give political cover to Democrats (including Senators Chuck Schumer and Hillary Clinton) who voted for it.

The legislation has nonetheless elicited some principled and vigorous Democratic opposition, from John Kerry, Jon Corzine, Dick Durbin and Ted Kennedy, among others. The bill's critics argue that it will squeeze the lower middle class right out of the system. This demographic, they say, might still earn above their state's median income, deductions notwithstanding, yet may not be able to afford to hire an attorney to prove through litigation that their story is exceptional.

Moreover, says Elizabeth Warren, there's a good chance many middle-class debtors wouldn't even be able to make Chapter 13 repayments. Nearly two-thirds of those who file for Chapter 13 aren't able to pay up, leaving them vulnerable to creditors for years, she notes.

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