Lawmakers Reintroduce Consumer Bankruptcy Reforms
Recently, Senator Elizabeth Warren and Representative Jerrold Nadler reintroduced the Consumer Bankruptcy Reform Act. This legislation would simplify the consumer bankruptcy system for individuals and families.
The bankruptcy attorneys at Amourgis & Associates, Attorneys at Law have closely followed this legislation and what it will mean for our clients. For more information about bankruptcy laws in 2022, contact us today for a free consultation.
What Are the Main Changes Outlined in the Consumer Bankruptcy Reform Introduced in 2022?
The main change outlined in the Consumer Bankruptcy Reform Act is creating a new consumer bankruptcy chapter called Chapter 10. Chapter 10 would replace Chapters 7 and 13. It would instead provide two routes for individuals and families to file for bankruptcy:
- No-payment discharge — Some debtors with little assets or income may be eligible to immediately discharge most unsecured debts, with some exceptions.
- Debt-specific plan — Debtors with valuable assets or annual income over 135 percent of the median income for the state and household size must enter a repayment plan. The plan can use assets or income to cover debts. Secured debt, such as mortgages and car loans, are handled through specific residence or property plans.
Other notable changes to bankruptcy filings proposed in the legislation include:
- Debtors can separate financial obligations and focus on specific debts.
- Attorney’s fees can be covered through a repayment plan.
- The requirement for pre-credit counseling would be repealed.
- Debtors may be able to stay in their homes and keep their cars, helping protect families from further insecurity.
- Renters can also remain in their residences without first repaying all back rent.
- Student loan debt can be treated like most forms of consumer debt.
- Dischargeable and non-dischargeable debts are amended to address racial and gender disparities.
- It eliminates some loopholes abused by wealthy filers.
How Is the Bill Different Than 2020?
The 2020 version and 2022 update of the Consumer Bankruptcy Reform Act are virtually the same. When Senator Warren and Congressman Nadler introduced it in 2020, it stalled in the Senate. If a bill is not enacted before that Congress adjourns, it must be reintroduced in the next Congress.
FAQs on Chapter 10 Bankruptcy
Let’s address some of the frequently asked questions we hear about the proposed Chapter 10 bankruptcy:
What Does This Mean Right Now?
Because the Consumer Bankruptcy Reform Act is only proposed legislation, you will likely still need to file either Chapter 7 or Chapter 13 bankruptcy. However, the current bankruptcy process is complicated. It helps to work with an experienced bankruptcy attorney.
How Would Chapter 10 Bankruptcy Help Me?
The new Chapter 10 bankruptcy process would streamline the process for consumers. It would help families remain in their homes while they develop a debt plan and allow individuals to keep their cars so they can continue driving to work.
Who Should I Contact to File Bankruptcy in Ohio?
If you are struggling to manage your debt and repay creditors, the bankruptcy attorneys at Amourgis & Associates, Attorneys at Law could help you understand your legal options and guide you through the confusing bankruptcy process. Our lawyers are dedicated to finding financial solutions for Ohio families.
Contact Amourgis & Associates, Attorneys at Law today for a free case evaluation.
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At Amourgis & Associates, Attorneys at Law, we only represent consumers. We fight for regular people who have been seriously hurt in accidents. We fight for people who are being crushed by overwhelming debt and need a fresh start. We fight for individuals and families. Never businesses. Never insurance companies. We are loyal to the consumer.
