Bankruptcies to Become More Complex.

When the proposed new bankruptcy law is finally signed, you'll be surprised at how complex the process is going to be.

Not only will it be harder to wipe out bills and start fresh, those filing will face extra costs and a mandatory counseling system that hasn't yet been entirely set up. You may have to wait for counseling while the interest charges mount on your unpaid debts. Creditors will have a stronger hand.

At the moment the bankruptcy bill has stalled, awaiting a conference between the House and Senate. The Senate majority leader, Trent Lott, and the minority leader, Tom Daschle, are feuding over whether the Senate portion of a conference committee should be half Democrat or majority Republican.

Once that's resolved, the bill will almost certainly pass. It takes effect 180 days after the president signs it into law.

Generally speaking, here's how bankruptcy will proceed, says bankruptcy specialist Todd Zywicki, a law professor at George Mason University in Arlington, Va.:

Before going bankrupt, you'll have to go through consumer credit counseling, at your expense. The counseling service will try to work out a repayment plan that satisfies your creditors.

If you can't repay, you'll file for bankruptcy.

You'll disclose your income and assets to the court, with one new requirement: Your disclosure has to include your most recent tax return. That's to stop bankrupts from misstating what they earn.

There are also provisions for people who want a Chapter 7 bankruptcy. This chapter lets you wipe out your unsecured debts -- mainly credit-card debts (for the wealthy, personal loans).

You'll still owe all your secured debt, such as your mortgage. The new law puts more of your debt into the secured category.