A bankruptcy reform bill expected to become law will make filing for bankruptcy more difficult. And it will give creditors more recourse in some instances.
Under current law, the majority of consumers who file for bankruptcy do so either under Chapter 7 or under Chapter 13.
In a Chapter 7 bankruptcy, your assets (minus those exempted by your state) are liquidated and given to creditors, and many of your remaining debts are cancelled, giving you what's known as a "fresh start." In 2004, over 1.1 million people filed for Chapter 7, accounting for roughly 72 percent of non-business bankruptcies.
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