(FORTUNE Small Business) – America may soon become a little less hospitable to entrepreneurs. The Senate's recent passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (and, at presstime, its likely House approval) will push as many as 210,000 debtors a year into repayment plans--folks who would otherwise dissolve their obligations in bankruptcy. The country's entrepreneurial culture is connected to its lenient bankruptcy laws--often admired by outsiders for the flexibility they give risk takers in starting anew. States where bankruptcy laws are loosest, in fact, boast the highest levels of company ownership. Starting a business is risky--300,000 more shut down in 2004 than were started--and Greg Jordan, a Chicago bankruptcy lawyer, says the bill will make starting over even more difficult: "People won't be able to start a new business, because nobody will lend them money." --IAN MOUNT