S 4980 — Consumer Bankruptcy Reform Act of 2022

Summary

Consumer Bankruptcy Reform Act of 2022 This bill generally revises consumer bankruptcy law by establishing a new Chapter 10 for individual debtors with not more than $7.5 million in debt. The bill eliminates the ability of individual debtors to file for bankruptcy under Chapter 7 liquidation bankruptcy and repeals Chapter 13, which requires individual debtors to comply with a repayment plan to receive a discharge of debt. Under Chapter 10, debtors may receive a discharge of debt through making minimum payment obligations based on the debtor's assets and income which may result in immediate discharge for individuals with no minimum payment obligation. The bill also provides for residential protections for debtors and revises what type of debt is dischargeable in bankruptcy. An individual may obtain a discharge under Chapter 10 once every six years. Individuals may seek limited bankruptcy proceedings on certain debts, such as a home mortgage. The bill also establishes consumer bankruptcy protections, including by creating a Consumer Bankruptcy Ombuds at the Consumer Financial Protection Bureau.

Bill Text

• Introduced Introduced in Senate Current html September 28, 2022

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill adds a new chapter to the Bankruptcy Code specifically tailored for individual bankruptcy and amends provisions related to domestic support obligations.

• 28 U.S.C. § 586

  The United States trustee-- (1) shall appoint 1 disinterested individual to serve as trustee from the panel of private trustees under section 586(a) of title 28 or a standing trustee under subsection (b) of that section who meets the requirements of a trustee under section 522 of this title; or (2) may serve as trustee.

  This establishes the appointment and duties of a trustee in cases under the new Chapter 10 of the Bankruptcy Code.

• 28 U.S.C. § 586

  The trustee shall-- (1) perform the duties required under paragraphs (2) through (5) and (7) of section 704; (2) appear and be heard at any hearing that concerns-- (A) the value of property subject to a lien; or (B) confirmation of a repayment plan, a residence plan, or a property plan; (3) advise, other than on legal matters, and assist the debtor in the formulation of, and performance under, any plan; (4) ensure that the debtor commences making timely payments under section 1025; (5) in the case of a debtor against whom there is a claim for a domestic support obligation, provide the notices required under subsection (d); (6) in the case of a debtor engaged in business as described in section 1003(a), perform the duties required under paragraphs (3) and (4) of section 1106(a).

  This outlines the specific duties of the trustee in managing cases under Chapter 10 of the Bankruptcy Code, emphasizing the handling of domestic support obligations.

• In the case of a debtor against whom there is a claim for a domestic support obligation, the trustee shall-- (A) provide written notice of the claim to the holder of the domestic support obligation that includes-- (i) a notice of the right of the holder to use the services of a State or local child support enforcement agency for assistance in collecting child support during and after the case; and (ii) the address and telephone number of the State or local child support enforcement agency of the State or political subdivision thereof in which the holder resides; (B) provide written notice of the claim to the State or local child support enforcement agency of the State or political subdivision thereof in which the holder resides that includes the name, address, and telephone number of the holder of the domestic support obligation; and (C) on the date on which the debtor is granted a discharge under section 1031, provide written notice to the holder of the domestic support obligation and the State or local child support enforcement agency of the State or political subdivision thereof in which the holder resides of-- (i) the granting of the discharge; (ii) the most recent known address of the debtor; (iii) the most recent known name and address of the most recent known employer of the debtor; and (iv) the name of each creditor that holds a claim that is not discharged under paragraph (2) or (4) of section 523(a).

  This introduces new requirements for trustees concerning notification related to domestic support obligations in bankruptcy cases.

Action History

1. September 28, 2022

   Introduced in Senate

2. September 28, 2022

   Read twice and referred to the Committee on Finance.

Sponsors

• Elizabeth Warren · Primary

Subjects