# Consumer Bankruptcy Reform Act of 2024 Summary
This legislation would overhaul the consumer bankruptcy system by creating a new Chapter 10 and eliminating the current Chapter 13. The bill aims to simplify bankruptcy for individuals facing financial hardship from job loss, medical bills, student loans, or other circumstances beyond their control.
**Key Changes:**
The bill replaces the complex dual-track bankruptcy system with a single streamlined Chapter 10 process that gives debtors more flexibility. Debtors can file repayment plans (for unsecured debts), residence plans (to modify home mortgages), or property plans (to modify other secured debts). Plans typically last 36 months rather than the current 60 months. Importantly, debtors with no minimum payment obligation receive an automatic discharge without filing a plan.
The legislation allows debtors to modify mortgages on primary residences and car loans based on actual vehicle value, addresses that currently cannot be done. Student loan debt becomes dischargeable on equal terms with other debts. Attorney fees are capped and made more affordable, with restrictions on creditor practices.
**Who It Affects:**
Individual debtors in financial distress, particularly those with low to moderate incomes. The bill includes provisions addressing racial and gender disparities in bankruptcy outcomes and protects those with domestic support obligations.
**Funding and Implementation:**
Filing fees for Chapter 10 cases are set at $250. The bill allows fee waivers for individuals with income below 150 percent of the poverty line. It takes effect one year after enactment. The legislation also establishes a Consumer Bankruptcy Ombuds within the Consumer Financial Protection Bureau and requires data collection on bankruptcy demographics to identify disparities.
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