The House has voted 302-126 for final passage of a bankruptcy reform bill that will make it harder for consumers with average incomes to use the bankruptcy courts to avoid repaying their debts.It has taken Congress eight years to pass the bill (S. 256), which has strong backing from the financial services industry. President Bush is expected to sign the legislation. (The Senate passed the bill in March by a 74-25 vote.) The bankruptcy bill addresses some commercial and residential foreclosure abuses. It also contains language prohibiting "cramdowns" to stop bankruptcy judges from reducing the principal amount of a home mortgage when the underlying value of the property has declined. Diane Casey-Landry, president of America's Community Bankers, said the U.S. Supreme Court outlawed cramdowns in 1993, but the practice persists. "This legislation will hold down the cost of home mortgage loans by once-and-for-all prohibiting federal district courts from reducing the value of secured loans in bankruptcy proceedings," she said.

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