Clinton May Veto Bankruptcy Proposal

President Clinton, who supports rewriting the bankruptcy laws in principle, is threatening to veto pending legislation he contends is unfair to ordinary debtors.

In a letter to congressional leaders sent Friday, Clinton said he especially objected to provisions that would limit the amount of money some bankrupt consumers could keep in their retirement accounts and allow debt collectors to charge people high fees if they failed to make good on bounced checks within a month.

“We . . . must ensure that a reasonable fresh start is available for those who turn to bankruptcy as a last resort when facing divorce, unemployment, illness and uninsured medical expenses,” the president wrote.

At the same time, he said, he recognized the need to reduce abuses of the bankruptcy court system by a few debtors.

The legislation is being pushed by banks and credit card companies and has raised protests from consumer advocates, unions, women’s groups and religious leaders.

Lawmakers have been working for weeks behind closed doors to try to reconcile differing House and Senate bills, both passed by veto-proof margins, that would make it harder for people to file for bankruptcy.