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ALEXANDRIA, Va. — Your financial life flashes in front of you in a matter of minutes: your mortgage, income, bills, life insurance, taxes. You’re being grilled under oath in a room full of strangers, each awaiting a turn under the spotlight. 

“Still got the ’91 Honda Civic?” attorney Gordon Peyton asked a man while scanning a document listing what the man had and what he owed. “Are you expecting a tax refund this year?” 

Watchers sat solemnly in rows of comfortable chairs. Some spoke in anxious tones with their lawyers. A nervous din filled the hallway outside, while on a brick veranda, cement urns were loaded with fresh cigarette butts. 

Peyton is a bankruptcy trustee who conducts these one-on-one public meetings with people who want to wipe away their debts under Chapter 7 of the U.S. Bankruptcy Code. Mandatory sessions like this take place across the nation. 

People come here for many reasons – job loss, medical disaster, divorce, drug addiction. It’s the0 culmination of a financial struggle for many, marked by pressing phone calls from creditors and sleep-starved nights. Some are eager to tell their story to a reporter but are too embarrassed to have their name printed. 

Proponents of overhauling the bankruptcy laws say it’s too easy to erase credit-card and other debts under Chapter 7, and that the system is being abused. Both the House and Senate this month passed bills to toughen the rules, and President Bush has signaled he would sign such legislation. 

Congress proposes a new income-based test for those seeking Chapter 7 protection. If a person were found to have sufficient income to repay at least 25 percent of the debt over five years, debtors generally would be required to file instead under Chapter 13, which requires a court-approved repayment plan, rather than dissolution of unsecured debts. 

For about 500 years in England, imprisonment for defaulting on debts was the order of the day. Creditors in ancient Rome were authorized to carve up a debtor’s body, according to scholars. 

There are no debtors’ prisons in this country. The closest this system comes to a public pillory may well be these meetings under Section 341 of the Bankruptcy Code. 

In Alexandria, across the Potomac from Washington, dozens of people were interviewed on a recent afternoon. Each was sworn in while sitting alongside his or her lawyer at a large table, and on the other side sat Peyton and his two assistants. Occasionally a creditor’s lawyer – from a department store or bank, for example – pulled up a chair. 

The filers were young and not-so-young, men and women, whites and African Americans and Asians and Hispanics. Their occupations include postal worker, delivery driver, candy store owner, retail clerk. They live in upscale suburbs like Falls Church as well as rural towns in northern Virginia. 

Many were casually dressed. Nearly all had an attorney. 

“These people wanted to live the American dream,” lawyer Joel Steinberg said. “Their kids have doctor bills, they have car problems, they begin to dip into the credit cards.” 

Steinberg said many of his Chapter 7 clients have fallen on hard times in an expensive area of the country despite jobs that pay fairly well. That means they likely would fail the means test in the new legislation and be forced into Chapter 13 reorganization. 

Peyton and other trustees are private attorneys appointed by the Justice Department. Their job is to clear out the underbrush, to administer a heavy load of cases so most of them don’t have to go before a judge. At the federal bankruptcy courthouse, six blocks away in Alexandria’s historic Old Town district, some days go by without any cases being heard. 

“This is where the rubber meets the road,” Peyton said after the grueling four-hour session. He averages 12 interviews an hour and is paid $65 per case, regardless of how simple or complex. He is a bit like a circuit-riding judge, coming to preside at these meetings once every two weeks. 

A large, affable man, Peyton wishes several of the debtors “Good luck” with a hint of sympathy when he releases them from the interview. 

When he suspects abuse, Peyton’s good humor vanishes. He sharply scolds an immigrant woman with an apparent gambling problem who he believes to be less than honest. If she doesn’t file her back tax returns in 30 days, he says, he’ll recommend to the bankruptcy judge that she be incarcerated. 

“Then she’s going to be back in front of that judge to explain why she shouldn’t go to jail,” Peyton told her lawyer and translator. “I want some truthful answers. I want to know how come she owes this casino $2,700.” 

In return for debtors’ clean financial slate under Chapter 7, the trustee legally takes over their property, except for basic necessities such as a car, clothing and work tools. 

Property with value is sold to pay creditors. Debtors generally are allowed to keep some personal items and possibly some of the equity in their home, depending on state laws. 

“Still got the Olds?” Peyton asked another woman. “They’re not going to make those any more – you’d better hold on to it.”