Joining Bernie Sanders in going after Joe Biden less then a month before the voting starts for the 2020 Democratic Presidential nomination, Elizabeth Warren, a bankruptcy expert, calls for a change in the American bankruptcy law…
Biden supported the current law….
Warren would make more palatable adjust menus including working to redo the hideous student loan laws that have strapped millions , who will never repay the rapidly escalating loan depth….
Sen. Elizabeth Warren (D-Mass.) wants to make it easier for Americans to go through bankruptcy, unveiling a plan Tuesday that she cast as a way to reverse the damage wrought by a 2005 law championed by her presidential rival Joe Biden.
That law, which imposed new requirements on filing for personal bankruptcy and limited the kinds of debts that can be forgiven, “made the 2008 financial crisis significantly worse,” Warren wrote in a Medium post announcing her plan.
The plan would eliminate a means test included in the 15-year-old law that required people making more than their state’s median income to go through Chapter 13 bankruptcy, a longer and costlier process than Chapter 7.
Warren would replace the two chapters, giving distressed borrowers the chance to either surrender their property to have their debt discharged, along the lines of Chapter 7, or choose from a “menu of options” to restructure specific debts while continuing to pay down others outside bankruptcy.
Student loan debts would be dischargeable; under current law, those loans are only forgiven in cases where they are found to cause “undue hardship” for the borrower.
Filers who select a prepayment plan, meanwhile, would be able to set aside more money to cover normal costs under her proposal, which would also allow borrowers to modify their mortgages in bankruptcy. And the plan would eliminate the 2005 requirement that borrowers get pre-filing credit counseling.
Warren and Biden have long been at odds over bankruptcy. As a U.S. senator from Delaware, Biden was one of the marquee Democrats to support the 2005 Republican legislation meant to crack down on soaring bankruptcy rates.
Warren, then a Harvard law professor who made her name in bankruptcy law, had lobbied against the bill for years, arguing that lenders were at fault and borrowers shouldn’t be punished.
“I lost that fight in 2005, and working families paid the price,” Warren wrote Tuesday….