I’m attorney Robert Geller and I am a consumer bankruptcy attorney in Florida. Today, I want to talk to you briefly about what you should know about proposed bankruptcy law changes. The changes pertain mostly to people who are considering filing a chapter 7 or chapter 13.
With the new presidential administration and new Congress, there are lots of things being posted online about potential changes. There’s also news that there may be some changes to bankruptcy laws. People want to know what those changes are and when they might happen.
Let me start by sharing a little bit about my experience with bankruptcy laws that changed about 15 years ago.
The most important thing to know is that it takes a while for bankruptcy laws – and most laws – to change. The last time the laws changed, about 15 years ago, the proposed legislation went on for many years before anything happened.
There’s a lot going on in our country right now with COVID and the stimulus package. I don’t think we should expect that any of our current consumer bankruptcy laws will change that quickly.
But what are the potential changes being proposed?
Potentially they can make student loans dischargeable, meaning that you wouldn’t have to pay them back. Personally, I doubt this will happen completely. I assume there will be certain criteria in place that allows some people to do it and some to not. In the old days, when I first began filing bankruptcy cases for clients, 30 years ago, student loans were dischargeable, if someone owed for more than seven years. And you were in default for seven years, I think potentially down the road that the student loans might be dischargeable under that scenario.
But now, I don’t think they’re just going to let you file a chapter 7 bankruptcy and discharge your student loans right away. No matter how much people want it, banks and lenders don’t want it.
If you have any questions about filing for consumer bankruptcy, please feel free to reach out and call us right now or feel free to schedule an appointment.