July 28, 2021

Chairman Nadler Believes Bankruptcy System Is “Stacked” Against Consumers

Yesterday, the House Judiciary Committee held what will be the first in a series of bankruptcy-themed hearings.

The hearing focused on Chapter 11, business issues—however, the Chairman of the Committee, Congressman Jerry Nadler (D-NY), announced that he believed the bankruptcy system is “stacked” against consumers and that he would be seeking “solutions” to this problem.

In particular, Chairman Nadler discussed how, in his view, the 2005 reform legislation was harmful to the poor. Specific topics to be covered in future hearings include student loans, the role of the US Trustee program and racial disparities in the bankruptcy system.

On Tuesday, August 3rd, the Senate Judiciary Committee will examine whether the bankruptcy laws should be changed to permit the discharge of student loans, which could drive an increase in consumer filings.

AIS will continue to monitor developments and issue future alerts.