“The 2005 bill imposed the same onerous paperwork requirements on a middle-class American filing bankruptcy that it did on a wealthy real-estate developer,” Warren said. “My plan would make the bankruptcy system simple, cheap, fast, and flexible.”
Warren would also reverse the provision of the 2005 bill that requires people to seek prefiling credit counseling and would waive filling fees for anyone below the poverty line.
She vowed to loosen the spending limitations on people who are in a bankruptcy process and make it easier to get relief from student loan debts in bankruptcy by making them dischargeable like other consumer debts. Her plan would modify the law to allow people undergoing bankruptcy to modify their mortgages, which is mostly prohibited.
Warren vowed to increase accountability for creditors and crack down on bankruptcy practices that the wealthy and big corporations use to shield their assets. Her plan would ensure that assets placed in self-settled trusts and revocable trusts are not exempt from creditors’ claims in bankruptcy.
She would stop companies from collecting debts that are no longer valid and would allow people to sue creditors who try to collect debts that have already been discharged.
In national polls, Biden has a consistent lead and Warren places third, behind Senator Bernie Sanders of Vermont. But Biden is weaker in the early states of Iowa and New Hampshire, where Warren is hoping for a strong finish that bolsters her prospects in subsequent states.
Sanders also took aim at the former vice president over the 2005 legislation, saying Monday evening on CNN that “Joe Biden pushed a bankruptcy bill which has caused enormous financial problems for working families.”
The new Warren plan reinforces her image as a progressive candidate who’s pitching herself as an anti-Wall Street crusader who sweats the details of policy. In her policy paper, she wrote that even with the Consumer Financial Protection Bureau, “there are still serious problems with our bankruptcy laws today, thanks in large part to that bad 2005 bill.”
This article was provided by Bloomberg News.