To amend title 11, United States Code, to add a bankruptcy chapter relating to the debt of individuals, and for other purposes.
About This Bill
Committee
Latest Action · December 18, 2024
Referred to the Committee on the Judiciary, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
# Consumer Bankruptcy Reform Act of 2024
This bill would fundamentally restructure the U.S. bankruptcy system for individual consumers by replacing the current Chapter 13 repayment plan option with a new Chapter 10 system.
**What the bill does:**
The legislation creates a streamlined bankruptcy process designed to make filing easier and cheaper for struggling individuals. It eliminates Chapter 13 (the current repayment plan bankruptcy) and replaces it with Chapter 10, which offers three types of plans: repayment plans for unsecured debts, residence plans to modify mortgages, and property plans to modify other secured loans like car payments. A key innovation allows debtors with no minimum payment obligation to receive automatic discharge without filing a plan.
The bill significantly expands what debts can be discharged. Most notably, it allows private student loans to be discharged like other debts, permits mortgage modifications on primary residences without time limits, and lets debtors reduce vehicle payments to the car's actual market value rather than the full loan amount. It also discharges tax penalties after a certain period and limits exemptions for wealthy debtors to prevent abuse.
**Who it affects:**
The changes primarily benefit individual debtors filing personal bankruptcy. The bill includes consumer protection provisions that strengthen enforcement against creditors who violate discharge orders and prohibit creditor abuse. It also eliminates certain credit counseling requirements and simplifies paperwork requirements compared to current law.
**Key funding and timeline:**
The bill sets bankruptcy filing fees at $250 for Chapter 10 cases and allows fee waivers for low-income filers. It creates standing trustee positions with fixed compensation structures. The entire act takes effect one year after enactment, with existing bankruptcy cases continuing under current law. The bill also requires the Consumer Financial Protection Bureau to publish motor vehicle interest rate data to help with loan modifications.
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