The media is crushed with the presidential hearings, so much so, that little tidbits of information unrelated to POTUS seem to get missed in the mainstream press.
We became aware of a Democratic Presidential hopeful’s position on Bankruptcy, and the rights of creditors. As attorneys, we don’t feel it is appropriate to weigh in on her position, however, as our clients are creditors, in one form or another, we do believe that it is in our clients’ best interest to hear what the candidates are proposing that will have a direct impact on them.
We believe that the Commercial Law League of America (CLLA) summed up her position the best, and we include their review of Senator Warren’s position here, unedited.
https://clla.org/from-the-clla-newswire/ – scroll to Jan, 8 2020
Warren Plan to Shore Up Bankruptcy Rights
Sen. Elizabeth Warren released a plan yesterday to restore bankruptcy protections, in direct opposition to a 2005 law that fellow presidential candidate Joe Biden successfully promoted as a Delaware Senator.
Warren, as a bankruptcy lawyer, opposed and campaigned against the 2005 law from the start, as she believed that it damaged accessibility with increased costs and eligibility requirements only benefit creditors at the cost of working families. Her presidential plan would be to replace the two current main types of bankruptcy with a single system that would be more available to all debtors. Instead of Chapter 7, where individuals have to surrender their property, or Chapter 13, in which multiyear payments are entered into, Warren’s plan would offer a “menu of options” and would be a case-by-case basis whose options include payment plans or surrendering property. This is a big change from the current system.
Her plan actively works to remove some of the hurdles from bankruptcy, such as the following example from Warren: “the same onerous paperwork requirements on a middle-class American filing bankruptcy that it did on a wealthy real-estate developer”. In her plan, student loan debt would be dischargeable (as well as homes and cars), same as other consumer debts. Additionally, it would allow debtors to modify their mortgages (mostly prohibited) and reverse the provision in the 2005 law requiring credit counseling and fees for anyone below the poverty line.
Warren has also vowed to increase accountability for creditors and crack down on bankruptcy practices that the wealthy and big corporations use to shield their assets, stop companies from collecting debts that are no longer valid, and allow people to sue creditors who try to collect debts that have already been discharged.
In summation, the two candidates’ opposing positions on bankruptcy are clear, and Warren’s plan recalls this historical opposition.
We all have been blessed by the constitution with the right to vote. When it impacts our clients, we will publish the positions of different candidates, without injecting our own opinions. As lawyers, it is our job to uphold the law of the land, to the best of our ability, in the interests of our clients.
As citizens, it is our right to vote.