By PHILIP SHENON

New York Times

ASHINGTON, June 11 — Legislation that would rewrite the nation's bankruptcy laws and make it harder for people to erase their debts has begun to advance again on Capitol Hill, a result both of the Democratic takeover of the Senate and a renewed lobbying campaign for the bill by banks and credit card companies.

The House and Senate have each passed a version of the legislation by overwhelming bipartisan margins. But it was stalled for weeks by the inability of the Senate, while it was evenly divided between Democrats and Republicans, to organize a delegation to a House-Senate conference committee to reconcile the two different bills.

The Democrats' takeover in the Senate broke the logjam, and the new Senate majority leader, Thomas A. Daschle of South Dakota, has said that he will act quickly to organize a conference committee to move a bill to President Bush's desk.

"My interest is in moving into conference, resolving the differences between the House and the Senate and bringing a bill back," he said last week.

Congressional officials say that lobbyists for banks and credit card companies, which have been aggressively promoting the bill, have fanned out across Capitol Hill in the days since the balance of power in the Senate was tipped to the Democrats, urging lawmakers to take quick action on the measure.

Both the House and Senate versions of the bill would end the ability of many middle-income debtors to wipe out their so- called unsecured debts, like credit card bills, by filing for bankruptcy.

President Bush has already signaled that he will sign whatever bill is agreed upon by the House and the Senate. President Bill Clinton vetoed a similar bill, saying it was too harsh on consumers.

The renewed push toward final passage of a bankruptcy overhaul has alarmed consumer advocates, who say that the bill is a reward to banks and credit card companies in exchange for a drastic increase in their campaign contributions to both parties. The overhaul, they say, would harm vulnerable debtors who have been forced into bankruptcy because of medical bills, job loss or divorce.

There are significant differences between the House and Senate bills, and some of the differences have the potential of killing the bill in the conference committee.

Unlike the House version, the Senate version would place a $125,000 cap on home equity that can be shielded from creditors in bankruptcy, ending an unlimited exemption that now exists in several states, including Texas.

House Republican leaders from Texas say that they will never accept a cap. House leaders have also suggested they will remove a provision in the Senate bill that would end the ability of anti-abortion protesters to escape legal judgments resulting from clinic violence by filing for bankruptcy.

Consumer advocates say they hope that the differences between the House and Senate versions will prove to be irreconcilable and that the bill will die. "It's no surprise that there will be a conference, but it may be a lot of sound and fury signifying nothing," said Travis Plunkett, legislative director of the Consumer Federation of America.

Last Thursday, Senator Charles E. Grassley, an Iowa Republican who is one of the main sponsors of the bill, met with House Republican leaders to urge them to accept the Senate version, bypassing the need for a House-Senate conference and the possibility that opponents could use a conference as a means of killing the bill.

"He's looking for the best way to get the bill to the president's desk," said his spokeswoman, Jill Kozeny. But she said the House members refused, citing the dispute over the home-exemption and abortion issues, among others. "The fact is the they want some influence on the final product," she said. "At this point, they said they would not take up the Senate bill."