Thanks to assiduous efforts by credit card companies and banks, the House rushed through a bill on March 1, with scant media attention, that would make it radically more difficult for middle-class consumers to escape overwhelming consumer debt and make it a lot more likely that families will lose their homes and cars. The Senate is preparing for a rapid vote on the same measure.

Consider the assessment of these reforms by former federal bankruptcy judge Francis Conrad, an internationally regarded authority who has counseled the World Bank and helped the Czech Republic, Romania and the Philippines establish modern bankruptcy systems. Conrad is no sentimentalist. In 10 years on the federal bench, this hard-nosed jurist and financial analyst supervised the liquidation of the scandal-ridden junk-bond firm Drexel Burnham Lambert, and brought the New York Post back from the brink of extinction. What does Conrad think will happen if the brand of "bankruptcy reform" currently being peddled in Congress passes?

"People will be forced to pay the credit card companies -- instead of buying food, instead of paying alimony," he says. "You will create poverty."

Just how a bankruptcy bill that sticks it so thoroughly to the middle class came to be the No. 1 priority of the first Bush-era Congress is a study in influence-peddling. But the story is also deeper: The legislation before Congress this week is the culmination of a little-noticed campaign -- all the way up to Supreme Court Chief Justice William Rehnquist -- to fundamentally change the direction of America's bankruptcy courts.

Personal bankruptcy is not exactly an easy subject for political conversation. No one likes to think about how their finances are teetering -- or tanking. And yet it matters: 1.2 million households received bankruptcy protection last year, and another 15 million in the past decade, according to the Justice Department. And the bankruptcy safety-valve only grows in importance as the economy slows, with more families feeling the sudden pinch of joblessness.

Personal bankruptcy is a compassionate American tradition going back to the earliest days of the Republic, when debtors' prisons were replaced with an orderly legal process. As far back as 1831, this national commitment to giving overwhelmed individuals a fresh start won the admiration of Alexis de Tocqueville. "In America there is no law against fraudulent bankruptcies; not because they are few, but because there are a great number of bankruptcies," he wrote in "Democracy in America." "A sort of guilty tolerance is extended by the public conscience to an offence which everyone condemns in his individual capacity."

Banks and credit card companies -- which cannot collect consumer debt once courts grant families protection -- started lobbying heavily to change all of that more than two years ago, pumping millions into congressional coffers. Credit card companies and banks together gave $37.7 million to candidates and parties in 2000, according to Federal Elections Commission figures analyzed by Public Campaign, the campaign-finance-reform lobby. That's up 75 percent from 1998. And 61 percent of last year's donations went to Republicans.

President Bush -- who has indicated he'll sign the bankruptcy reform, unlike Bill Clinton, who vetoed it last year -- has his own special relationship with the credit industry. MBNA America, the nation's largest single credit-card issuer, was also the nation's single-largest single supporter of the George W. Bush campaign, with $240,700 in hard-money donations. And the company's CEO, George Cawley, was a Bush "pioneer" -- a select group whose members personally raised at least $100,000 early in the campaign.

And what, exactly, do we get with this express-track bankruptcy bill? It would give credit card companies first dibs on bankrupt consumers' debts -- ahead of any other bills except for child-support payments (an amendment tacked on in the House to placate reluctant moderates). It will establish for the first time an income-and-assets test for those applying for Chapter 7 bankruptcy, which dissolves most debts and allows families to keep their homes and other essential possessions. This "means test" would drive hundreds of thousands of families each year from Chapter 7 into Chapter 13. That requires repayment of many debts, and makes it more difficult to keep those essential assets.

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