Ignore "Bad: new and old password are too similar"
Solution 1:
For me I was able to avoid this message:
Bad: new password is just a wrapped version of the old one
(and a few other similar messages)
by running $sudo passwd <my_username>
instead of just $ passwd
Just obviously be aware of the security implications but at least it allows it now.
Solution 2:
A workaround would be to change the old password to a random one, and change it again to a similar one. The password history is not preserved, so this should work fine.
If you need a real solution, please include the contents of your /etc/pam.d/common-password
and /etc/pam.d/chpasswd
(preferably using a pastebin).