Bankruptcy Reform 2020 – Proposed Amendments

The Democrats now control the White House, Senate (50 Senators and the Vice President providing a tie breaking vote) and the House of Representatives.

Senator Elizabeth Warren is proposing changes to the Bankruptcy Code.

Some of the more interesting provisions are below

  1.  Combining Chapter 7 straight bankruptcy and Chapter 13 debt adjustment for most individuals, into a new single Bankruptcy Chapter

2.  Providing a discharge for many types of student loan debt – up to $50,000 in student loan debt

3.  Allowing debtors to pay for attorney’s fees both before and after filing (which can result in more people seeking a straight bankruptcy discharge, rather than a repayment plan).

4.  Eliminating credit counseling requirement, prior to filing.

5.  Make a uniform system for bankruptcy exemptions, to protect property from seizure and sale in bankruptcy   This becomes particularly significant becomes debtors can choose state exemptions, which vary widely by state.

6.  Allowing a modification of mortgage debt, to the value of the property, with a reduction in interest rates.

7.  Changing the rules as to when a debtor can seek a modification of a motor vehicle loan – to reduce the balance of the loan to the value of the property (cram down).  2005 law provides special rules limiting the ability of a debtor to cram down a motor vehicle loan to the value of the motor vehicle.

It is still to early to tell what, if any, changes will be made to the Bankruptcy Code.

If you have any bankruptcy questions, please feel free to contact

Attorney Robert M. Singer, 2572 Whitney Avenue, Hamden, CT  06518,  203-248-8278,

Serving New Haven County and all of Connecticut