Analysis: Five Bankruptcy Policy Issues to Watch After the Election​​​

Notable bankruptcy-related issues and legislative debates are awaiting the House, Senate and a new administration regardless of the outcome of the election in November, according to a WSJ Pro Bankruptcy analysis. Five issues to keep an eye on include: the subchapter V debt-eligibility limit, third-party releases, the “Texas Two-Step,” venue-shopping and student loan discharges. Prof. Robert Lawless of the University of Illinois College of Law said that updating bankruptcy rules on venues and third-party releases is important, but he doesn’t expect the next administration to focus on bankruptcy reforms because of other priorities. However, changes made to student loan discharges in bankruptcy could be rescinded “at the drop of a hat” by a new administration, because Republicans have made it clear they won’t support student loan debt relief, he said. “It’s not a regulation … so that could be affected by who the next president is,” Lawless said. Click here to read the full analysis.
 

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

U.S. Weekly Jobless Claims Fall; 2nd Quarter GDP Revised Higher​​​

The number of Americans filing new applications for jobless benefits slipped last week, but re-employment opportunities for laid-off workers are becoming more scarce, a sign that the unemployment rate probably remained elevated in August, Reuters reported. Although the labor market is slowing, it is doing so in an orderly fashion that is keeping economic expansion on track. The economy grew faster than initially thought in the second quarter, powered by consumer spending, other data showed on Thursday. Corporate profits also rebounded last quarter, helping to further dispel fears of a recession. Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 231,000 for the week ended Aug. 24. Claims have retreated from an 11-month high in late July as distortions from temporary motor vehicle plant shutdowns for new model retooling and the impact of Hurricane Beryl faded. Gross domestic product increased at a 3.0% annualized rate last quarter, revised up from the 2.8% rate reported last month, the Commerce Department's Bureau of Economic Analysis said in its second estimate of second-quarter GDP on Thursday. The economy grew at a 1.4% pace in the first quarter. Read more.
 

Credit Scores Without Debt? Fintech Cards Baffle Credit Industry​​​

Fintechs with names like Chime Financial and Credit Sesame are advertising an unusual perk on some of their products: Customers can boost their credit scores without ever borrowing or paying back any money, the Wall Street Journal reported. Millions of Americans have opened these so-called credit-builder cards since the first major ones came onto the market around the start of the pandemic. Customers deposit money into these accounts to pay bills or make purchases, much like with a debit card. Here’s the twist. Fintechs report some of these transactions to the credit-reporting companies as credit activity, or borrowing, even though no credit is ever extended to the customer. Fintechs tout credit-builder cards as a way to smooth out flaws in a credit-scoring system that, to some, makes little sense. Under normal circumstances, the only path to building a credit score is to borrow money. In other words, people need to take out loans to establish credit scores, but they need credit scores to be approved for loans. Credit-builder cards, on the other hand, often don’t require credit checks at all, much less a particular score. The cards are also designed to mainly report positive data. For example, the cards offered by Chime and Credit Sesame make it difficult or impossible for customers to become delinquent. (Subscription required.) Read more.
 

U.S. Pending Home Sales Gauge Drops to Lowest on Record​​​

A gauge of pending U.S. sales of existing homes sank in July to the lowest level on record, as high prices and borrowing costs continue to scare buyers away, Bloomberg News reported. A National Association of Realtors index of contract signings fell 5.5% to 70.2 last month, the lowest in data back to 2001, the group said today. The previously owned home market has been hamstrung by high borrowing costs and lean inventory for nearly two years. While mortgage rates have declined this month to the lowest level in over a year, high prices and limited inventory are deterring prospective buyers who might still be holding out for cheaper rates. The contract rate on a 30-year fixed-rate mortgage is now below 6.5% in the wake of recent comments from Federal Reserve Chair Jerome Powell, who said last week “the time has come” for the central bank to cut interest rates. Lower borrowing costs would help ease one of the least affordable housing markets in history. An index of U.S. home prices by S&P CoreLogic Case-Shiller hit a fresh record on Tuesday, with prices up 5.4% in the year through June. Read more.
 

Nomination Deadline is Sept. 6 for ABI's International Matter of the Year Award!

ABI’s International Committee is accepting nominations for its Third Annual ABI International Matter of the Year Award. For criteria, eligibility and other information on the award, please click here.

All nominations must be received by Sept. 6.
 

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — more than 95 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

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