Does the current system for consumer bankruptcy in Illinois and across the United States work as it should? For instance, does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) actually function to prevent abuses in Chapter 7 bankruptcy filings? Has federal law caught up with the practical needs of debtors in our current decade? In particular, do we need to rethink the ways in which federal bankruptcy law deals with student loan debt given the enormous amount of student debt owed by consumers throughout the nation?
These are just some of the questions that will be addressed by the Commission on Consumer Bankruptcy. In the meantime, what else should you know about the Commission, as well as how current bankruptcy laws may impact you?
Goals of the Commission on Consumer Bankruptcy
According to a press release from the American Bankruptcy Institute, the Commission on Consumer Bankruptcy is a new 15-member panel that was put together to “examine the consumer bankruptcy system and issue a report with recommended improvements that can be implemented within the existing structure.” Some of those improvements involve goals of “moderniz[ing] the consumer bankruptcy system with practical and cost-effective recommendations, building on the framework established by the Bankruptcy Code of 1978 and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.”
To gather information with the aim of issuing its final report, the Commission will use an “open, information-gathering model that will allow interested parties across the consumer bankruptcy spectrum to provide input.” In other words, it will not be just lawmakers or members of the judiciary who will be able to voice their concerns about the current bankruptcy system. Consumer protection advocates, as well as debtors themselves, will be able to provide important information and concerns to the Commission.
Who is in charge of the Commission? It is co-chaired by two retired bankruptcy judges. The Commission Reporter, who will “assist in operations and draft the final report,” is a law professor at the University of Illinois College of Law.
Specific Items for the Commission to Address
One of the more specific items on the Commission’s agenda is student loan debt and consumer bankruptcy. A recent article in the Wall Street Journal highlighted how “the federal bankruptcy law’s failure to help heavily indebted borrowers of student loans will be studied by a new panel of law professors, federal judges, and consumer advocates.” The article emphasized the current “consumer bankruptcy system’s lack of power to fix student loan debt” among other significant matters.
Why do we need to better address student loans and bankruptcy? When a consumer files for Chapter 7 bankruptcy, it is difficult to have student loan debt discharged. Moreover, a Chapter13 bankruptcy filing—which involves a three-to-five-year repayment plan, often does not account for the extended length of time necessary to repay substantial student loan debt.
Contact an Oak Park Bankruptcy Lawyer
Do you have questions about filing for personal bankruptcy? An experienced bankruptcy attorney in Oak Park can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.
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