Put off bankruptcy law

It makes no sense for the government to subject victims of Hurricane Katrina to a new bankruptcy law that makes credit-card debt harder to erase and puts added burdens on people struggling to cover medical bills.

Some members of Congress are proposing a waiver to exempt the hurricane victims from the rules that go into effect Oct. 17. That would be an expression of fairness for people trying to put their lives back together. Congress could be fair to the entire country by repealing the misguided bill that the banks and credit card companies couldn't have written better themselves. The changes make it harder for Americans to declare bankruptcy under Chapter 7, which limits the amount of repayments and allows debtors with severe financial problems to escape debts. Now, only people who earn less than their state's median income will be allowed to seek Chapter 7 protection; others will have to seek relief under Chapter 13, which requires reorganization and repayment.

Bankruptcy filings have surged to record numbers in recent months as consumers have rushed to take advantage of the more forgiving law while they still can. Added to the surge are thousands of victims along the Gulf Coast who have lost homes, businesses and their jobs. They are in no position to hire bankruptcy lawyers and assemble the paperwork needed to make their cases before the October deadline. Congressional Democrats and consumer advocates are proposing an extension of at least a year, an accommodation that is only reasonable given the personal devastation left in the storm's wake.

Most families that declare bankruptcy do so because of illness or loss of employment, often both. Credit-card companies' claims that gamblers and millionaire deadbeats are abusing the system have not held up under objective research. Studies have found that single mothers, minorities, the elderly and low-income people most often seek protection. If that sounds like the people who were left stranded at the New Orleans Superdome, they are.

Congress didn't close loopholes that allow wealthy families to keep mansions and other assets when they file for bankruptcy. The least lawmakers can do now is to stop the clock that's running on Katrina's victims and allow them a reasonable chance to respond to creditors.