Consumer Bankruptcy Reform Act of 2020

Categories: Bankruptcy

This Act is now pending before Congress. Here’s a link to the full Act, Here. The purpose of the Act is to establish a bankruptcy system that helps individuals and families in the United States regain financial stability and protects against abusive and predatory behavior by

  1. Streamlining the process of filing for bankruptcy, simplifying court procedures in bankruptcy, and lowering the cost of bankruptcy for both consumers and creditors;
  2. Creating a single-chapter consumer bankruptcy system that allows consumers greater flexibility in addressing their debts and prevents disparate treatment of similarly situated consumers;
  3. Offering consumers more and better options to deal with their debt, while ensuring fair treatment of creditors;
  4. Making it easier for consumers to pay an attorney for counsel or representation in a bankruptcy case;
  5. Simplifying the identification and treatment of cases by expanding the number of routine cases that are handled by the court in which there is no chance of a reasonable payment to creditors and
  6. reducing paperwork requirements in those routine cases;

  7. Allowing modifications of car loans based on the market value of a car;
  8. Allowing the discharge of student loan debt on equal terms with most other types of debt;
  9. Reducing racial, gender, and other harmful disparities in the availability, accessibility, costs, and outcomes with respect to the bankruptcy process;
  10. Ensuring the fair treatment of claimants for domestic support obligations;
  11. Reducing abusive creditor behavior; and
  12. Closing bankruptcy loopholes that allow the wealthy to exploit the bankruptcy process.

Well now, if this is not the best Holiday Gift Basket of an Act, I don’t know what is!!! If my reading of this Act is correct, consumer debtors will be able to file a bankruptcy case every Six (6) years instead of the current Eight (8) year waiting period. It eliminates the requirement to file an adversary proceeding to include student loans in that discharge, which has been the greatest barrier to a fresh start for many debtors.

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