Democratic presidential contender Elizabeth Warren yesterday proposed making it easier for struggling American families to wipe away their debts by reforming the country’s personal bankruptcy laws, Reuters reported. The issue is of particular importance to Warren, a former law professor at Harvard University who spent decades studying why individuals and families file for bankruptcy in the United States. Warren’s plan calls for repealing much of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that was backed by, among others, then-U.S. Senator Joe Biden, now one of Warren’s chief rivals for the Democratic presidential nomination. The legislation, which passed largely with Republican support and was favored by credit card companies, made it more difficult for individuals to clear debts through bankruptcy filings. Warren’s plan would streamline bankruptcy law by creating a single process and offering families far more flexibility in deciding how to discharge their debts. She would allow families in bankruptcy to set aside more money for basic needs, including rent and child care, and to avoid onerous legal fees. The 2005 bill also made it difficult to discharge student debt via bankruptcy, Warren said. The senator, who has also called for using higher taxes on the wealthy to erase student debt for millions of people, said she would reform the law to treat student debt like any other consumer debt in bankruptcy court.
