Many Americans in financial crisis soon will find it more difficult to erase credit-card charges, medical bills and other obligations simply by going to court. President Bush (search) signed a bankruptcy reform bill into law Wednesday and it goes into effect in six months.

Key Highlights

• Many debtors will have to work out repayment plans to fulfill their financial obligations.

• The law will require people in bankruptcy (search) to pay for credit counseling.

• The 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy every year in exchange for forfeiting some assets would be disqualified from doing so, according to the American Bankruptcy Institute.

• Those with insufficient assets or income could still file for Chapter 7 bankruptcy, which if approved by a judge erases debts entirely after certain assets are forfeited.

• Those whose earnings are above their state's median income who can pay at least $6,000 over five years — $100 a month — would be forced into Chapter 13, where a judge would then order a repayment plan.

• The law removes a safety net for the unemployed or those who face high medical bills.

• The legislation is the biggest rewrite of the bankruptcy code in a quarter-century and was pushed for eight years by banks and credit card companies.

The Associated Press contributed to this report.