Wednesday September 28, 2022 – United States Senator Elizabeth Warren and House Judiciary Committee Chairman Jerrold Nadler re-introduced the Consumer Bankruptcy Reform Act (CBRA). Both of these sponsored the same, or similar, bill in 2020.
You might be thinking, “didn’t Congress revamp the Bankruptcy Code with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)? The answer is, yes. Yes they did. But, in 2005, Congress was controlled by Republicans.
The CBRA will have Democrat issues addressed. Like, addressing racial and gender disparities in the bankruptcy system. Whatever that means.
The Act will also close loopholes that allow the wealthy to exploit the bankruptcy system. Again, whatever that means.
But, the biggest change would be allowing Debtors to discharge student loans in bankruptcy. Something that is very difficult to do under the current rules.
Warren and Nadler have historically supported the most extreme versions of bills. So, expect CBRA to give much to Democrat constituents and hit the middle class in the pocketbook.
Attorney Steven A. Leahy looks at the Consumer Bankruptcy Reform Act of 2022 on Today’s Tax Talk.