White House Contender Warren, Drawing on Academic Background, Proposes Bankruptcy Reform

Democratic presidential contender 👤Elizabeth Warren on Tuesday proposed making it easier for struggling families to wipe away their debts by reforming the country’s personal bankruptcy laws.

The issue is of particular importance to Warren, a former law professor at Harvard University who spent decades studying why individuals and families file for bankruptcy in the United States.

Warren’s plan calls for repealing much of a 2005 law that was backed by, among others, then-U.S. Senator Joe Biden, now one of Warren’s chief rivals for the Democratic presidential nomination. The legislation, which passed largely with Republican support and was favored by credit card companies, made it more difficult for individuals to clear debts through bankruptcy filings.

Warren and Biden have been sparring over the issue for two decades, starting when Biden still represented Delaware – whose corporation-friendly laws have made it a haven for many financial companies – and Warren was a nationally recognized bankruptcy law expert.

Warren, now a U.S. senator from Massachusetts, argued that her research showed most families go bankrupt not because of financial misbehavior but because of events out of their control: a lost job, a medical problem or a divorce.

But proponents of the bill at the time said it was needed to slow the pace of bankruptcies because too many people financially able to repay their debts were instead filing for bankruptcy.

In the spring, after Biden launched his campaign, Warren accused him of siding with credit card companies over families. But Biden has said the 2005 legislation was inevitable, given that Republicans held the White House and controlled Congress, and that he worked to add protections to the bill for working families and women.

Warren and Biden are two of the front-runners among the 14 Democrats vying to take on Republican U.S. President Donald Trump in the November 2020 election.