Here’s a lingering effect COVID-19 will likely have on our economy: a rise in bankruptcies. The number of people filing for bankruptcy could hit records next year. Let’s talk about how my bill to overhaul consumer bankruptcy rules will help Americans get back on their feet:
Data show that families who declare bankruptcy aren’t reckless or irresponsible—90% declare bankruptcy for one of three reasons: a job loss, a medical problem, or a family breakup. This has been a problem for decades, and the pandemic will likely make it worse.
But right now, our bankruptcy system isn't working for working families. Many individuals and families who should file for bankruptcy don't, and many who do encounter obstacles that prevent them from getting the financial relief they need.
My bill will make it easier for people being crushed by debt to get relief, end the absurd loopholes that make it impossible to discharge student loan debt in bankruptcy, close loopholes that allow the wealthy and corporate creditors to abuse bankruptcy, and more.
It will also help address shameful racial and gender disparities in bankruptcy. Families of color have far less wealth than white families on average, and far more debt. And to make matters worse, families of color are far more likely to be abused by predatory lending practices.
Bankruptcy laws affect Americans when they need it most. I’ll be fighting to make this plan a reality because government should be on the side of the people—but I can’t do it alone. We need to raise our voices as a grassroots movement.
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