The federal government makes changes to its bankruptcy laws every so often and states also pass measures of their own when they feel their laws require an update. In December of 2020, Senators Warren and Nadler introduced a new bill called the Consumer Bankruptcy Reform Act of 2020, which would make some changes to the nation’s current bankruptcy laws.
According to Senator Warren’s official government website, the act would…
“simplify and modernize the consumer bankruptcy system to make it easier for individuals and families forced into bankruptcy to get back on their feet.”
According to the senators, the current system doesn’t offer the right amount of support to individuals and families who have to file for bankruptcy. Families who file for bankruptcy spend too long recovering after filing for bankruptcy, and it’s hard for them to get back on their feet.
Here are some of the ways the senators hope the bill would help struggling families.
Reduce the cost of the bankruptcy process. The act would reduce the cost of filing fees, so people who were struggling could file without going even further into debt.
Combine chapter 7 and chapter 13 bankruptcies. The act would combine consumer bankruptcy types into one type that would streamline the filing process.
Add local government fines to bankruptcy options. People with local government fines could eliminate them through bankruptcy, which isn’t the case with the current laws.
Close loopholes for wealthy filers. There are some loopholes that wealthy individuals use to “game’ the bankruptcy system, and the new act would eliminate those loopholes.
Increase protections for consumers. Creditors would no longer be able to force consumers into arbitration if the consumer would prefer to take their case to court.
Bankruptcy is designed to be the last resort for individuals and families who are greatly indebted. Those sponsoring the Consumer Bankruptcy Reform Act hope that their legislation would aid families in recovering financially after bankruptcy.
Is It Too Hard to File for Bankruptcy?
There are thousands of people around the country that file for bankruptcy every year, and the process is definitely one where a lot of paperwork and time are involved. For the average citizen, filing for bankruptcy is a process that should be accomplished with the help of a lawyer.
However, it is possible to learn some valuable information about bankruptcy before heading to a lawyer to file. Here are some of the important facets of bankruptcy you’ll want to know – whether this new bankruptcy act is passed or whether the nation’s bankruptcy laws remain the same.
- Everyone who files for bankruptcy must undergo counseling before filing.
- A great lawyer makes a big difference in the ease of filing your case.
- You’ll either have your assets liquidated or be required to undergo a payment plan.
- Not all types of debts are dischargeable in bankruptcy.
Speaking with a lawyer can help tremendously in helping you decide whether to file for bankruptcy.
Are You Thinking About Bankruptcy?
Would you like assistance from an experienced legal professional with experience in bankruptcy law? Contact Suburban Legal Group for assistance with all matters relating to debt collection law, the FDCPA, and bankruptcy. A consultation is the first step.
DISCLAIMER: All information on this website is provided for informational purposes only and is not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein or any actions taken in reliance thereon.