Consumer Bankruptcy Reform Act of 2024

The Consumer Bankruptcy Reform Act of 2024 creates a new Chapter 10 bankruptcy system designed to help individual consumers facing financial hardship by simplifying the process and reducing costs. This new chapter replaces the existing Chapter 13 system for individual debtors and introduces three simplified plan options: a repayment plan for unsecured debts, a residence plan for modifying mortgage loans, and a property plan for other secured debts. The bill also expands protections for consumers by allowing student loan debt to be discharged on equal terms with other debts, prohibiting certain creditor actions that violate consumer financial laws, and establishing a Consumer Bankruptcy Ombuds to assist individual debtors. Additionally, the legislation requires courts to collect demographic data from debtors to identify and address disparities in the bankruptcy system, while maintaining the ability to convert cases to Chapter 11 or 12 if needed.