The Consumer Bankruptcy Reform Act of 2022 would create a new provision in the U.S. bankruptcy code — Chapter 10 — under which student loans would be treated like credit cards, medical expenses and other consumer debt.
Senator Elizabeth Warren plans this week to reintroduce a bill that would overhaul U.S. bankruptcy rules and create a potential path for Americans to erase their student loan debt.
The Massachusetts Democrat is set to introduce the measure on Thursday at a House Judiciary hearing on bankruptcy reform. Warren's proposal, co-sponsored by Democrat Jerrold Nadler of New York, comes as student loan debt has reached a record $1.7 trillion. Federal student loan payments, which have paused for the past two years because of the pandemic, are set to restart January 1.
Bankruptcy reform has long been a signature issue for Warren, a Massachusetts Democrat who taught bankruptcy law at Harvard University in the early 1990s and who is the author of many scholarly papers, articles and books on the subject. As part of that focus, she has argued that current bankruptcy law hurts the average American because it bars them from discharging student loans or home mortgages — often the two biggest obligations for consumers.