Durbin to Propose Legislation to Protect Families from Foreclosure?
The New York Times recently reported that Senator Richard Durbin (D-IL) would propose an amendment to the bankruptcy code that would offer more options to families facing foreclosure. No details have yet been revealed, but various news outlets are reporting that Durbin will introduce the "Helping Families Avoid Foreclosure Act" in September.
Presumably, the proposed amendments would give homeowners facing foreclosure more options in bankruptcy by deleting the qualifying clause that makes home loans virtually the only debt that cannot be effectively restructured in a Chapter 13 bankrupty case.
In April, the National Association of Consumer Bankruptcy Attorneys (NACBA), in cooperation with several other consumer organizations, released a proposal for bankruptcy reform. That proposal included deletion of the clause preventing the restructuring of home loans, along with provisions to preserve remedies against predatory lenders, prohibit enforcement of mandatory arbitration clauses, and other measures.