Bankruptcy, once the court of last resort for many over the collapse of a business or personal finances, is now becoming a financial planning tool for a growing number. The laws are in need of reform so that debtors own up to their responsibility.

 Last year an all-time record 1.4 million bankruptcy petitions were filed -- about one for every 100 households in the country. This, despite dramatic economic growth, low unemployment and rising personal income.

 And it affects us all, collectively and individually. An estimated $40 billion a year in hidden costs is passed on to consumers by those seeking shelter in bankruptcy. Locally, when the Louis Allis Company in West Allis filed for bankruptcy, workers were left holding the bag.

 Realizing the need for reform, Congress has been wrestling with reform legislation that would constitute the biggest overhaul of the bankruptcy code in 20 years. The Bankruptcy Reform Act of 1999, passed in the House and sent to the Senate, would ensure that people who declare bankruptcy actually pay a portion of their debts, if able.

 Employing a needs-based system, those able to repay some debt could be disqualified from Chapter 7 bankruptcy and made to file under Chapter 13. In Chapter 7, individuals are allowed to liquidate their assets and wipe out most unsecured debts, such as money owed to credit card issuers. Chapter 13 plans require repayment of some of those debts, and under reform, debtors would be subject to a test to determine how much they would be required to repay.

 The reform act also contains an amendment I authored that would prevent future abuses such as occurred at Louis Allis. House Judiciary Committee member Tammy Baldwin of Madison successfully offered my proposal, which declares that in business bankruptcy proceedings money for pension and health benefits previously withheld from employee paychecks belongs to workers - not creditors.

 Like many employers, Louis Allis set up a 401(k) retirement plan for its employees, withheld a portion from workers' paychecks each pay period, and should have transferred those monies to the retirement plan. That didn't happen. Strapped for cash, company executives used more than $200,000 in worker retirement contributions to pay banks and other creditors.

 When Louis Allis filed for bankruptcy, the $200,000 was considered part of the company's estate. Nothing in law requires that workers be given back their retirement contributions.

 While changes in the bankruptcy laws would not apply to past abuses such as the Louis Allis case, the amendment would in the future keep withheld employee funds separate. Any company filing for bankruptcy would be required to put all funds withheld from employee paychecks in the proper retirement, health, or benefit accounts before creditors are paid. The Bankruptcy Reform Act also includes provisions that will benefit consumers. Credit card lenders would be required to disclose interest costs on minimum monthly payments. Moreover, this provision gives long-overdue priority to the payment of child support and alimony, moving them from seventh to first on the priority list, in front of such creditors as attorney fees.

 Passage of bankruptcy reform is not assured. A Senate bill with some significant differences is also making its way through Congress. Last year similar legislation prolonged by controversy simply ran out of time. Congress adjourned and reform died.

 Given the explosion of filings and record of abuses, Congress must crack down on these bankruptcies of convenience.