Bankruptcy law would mean tougher consequences for consumers.
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CHICAGO _ The Frank McBride family of Waukegan, Ill., would have had to significantly reduce their monthly living expenses if he filed for bankruptcy protection under reforms passed by the Senate Thursday. The failure of McBride’s construction business saddled him with more than $100,000 in unpaid personal loans and credit card debt. He owed roughly an additional $400,000 in other loans and unpaid income taxes. By filing for Chapter 7 bankruptcy status, McBride liquidated most of his assets, including his house, and erased most of his financial obligations, according to his bankruptcy filing. Now, his family is living off of $8,000 a month in income (before monthly expenses) while still paying off debts that couldn’t be discharged in bankruptcy court such as $36,000 in student loans. But under the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005″ the father of three probably would have been forced to file under Chapter 13, and the consequences would have been far more dire for him and his family. Among other things, the family’s… |