Consumer Bankruptcy Overhaul Envisioned in New Bill: Explained

Congressional Democrats have reintroduced a bicameral bill that would radically alter how individuals file bankruptcy, a response to criticism that the process is too complicated and disfavors people of color.

The Consumer Bankruptcy Act of 2022 was introduced in September by two Democrats—former bankruptcy professor Sen. Elizabeth Warren and chairman of the House Judiciary Committee Rep. Jerrold Nadler. The proposal is the lawmakers’ latest attempt to introduce sweeping reform after a prior version of the bill introduced in 2020 failed to gain traction.

Why Change Personal Bankruptcy?

Bankruptcy is supposed to give the “honest but unfortunate debtor” a means to ...