If your financial situation is not where you want it to be, we understand the stress you are under. Many Floridians look for a way to avoid bankruptcy, but sometimes, it’s the best and simplest option for overcoming extreme debt. At the same time, filing for bankruptcy can be complicated for the average person, and very rarely is filing on your own a good idea. Today, we will be looking at some of the changes possibly coming in 2025 to federal and state bankruptcy laws, how the overall landscape is changing, and how experienced attorneys can help guide you every step of the way.
Proposed “Chapter 10” Bankruptcy Has Uncertain Future
As we move toward 2025, one of the most significant legislative developments in bankruptcy law is the Consumer Bankruptcy Reform Act (CBRA). Originally introduced by Senator Elizabeth Warren and Representative Jerrold Nadler in December 2020, the CBRA aims to fundamentally transform bankruptcies in the U.S. by consolidating Chapters 7 and 13 into a new, streamlined Chapter 10. This proposed Chapter 10 would ideally simplify the filing process and make it more accessible, but it would be a radical shift from what the U.S. and Florida currently operate under.
The CBRA also seeks to address longstanding issues in the bankruptcy system, such as the challenges surrounding the discharge of student loan debt. Federal student loans are not currently dischargeable in bankruptcies, despite some loan forgiveness programs operating under the current administration. The act would significantly alleviate the financial burden on debtors – particularly younger Americans – overwhelmed by educational loans.
However, despite its initial introduction and the backing of prominent figures, the CBRA has faced hurdles during the legislative process. It was reintroduced in the subsequent Congress sessions, but the latest updates don’t particularly indicate a quick adoption, mainly due to shifting political dynamics and the broader economic changes since 2020.
Current Trends in Bankruptcy Filings
According to the Administrative Office of the U.S. Courts, bankruptcy filings in the United States are exhibiting a notable upward trend compared to the same time last year. After a period of decline during the pandemic years, largely due to temporary government relief measures, the number of filings began to rise again in 2022 and has continued into 2024. As reported, there has been a 16% increase in bankruptcy filings in the year ending March 2024 compared to the previous year.
On a broad level, this increase highlights the ongoing economic challenges many Americans face as pandemic-era protections expire. This increase is not isolated to any one region; it reflects a nationwide trend. Certain areas of the state, like the Middle District of Florida, have seen exceptionally high filing numbers, but everyone in the state may face financial issues that warrant bankruptcy.
For anyone considering bankruptcy, these trends can be good news in a certain respect. First-time bankruptcy filers are often held back due to misconceptions and preconceived notions about those who file for bankruptcy. It can be hard to admit you need help and that you need to take action. The rising number of filings suggests that more individuals and families consider bankruptcy a viable option to manage insurmountable debts. You aren’t alone; if you are struggling in the current landscape, consider all options, including bankruptcy.
Technological Advancements in Bankruptcy Proceedings for 2025
Unless proposed legislative changes are signed into law, bankruptcy in 2025 will look similar to its current iteration. However, that mainly applies to the financial details, requirements, and filing concerns. Regarding how bankruptcy plays out in real life, recent years have looked very different than even a decade ago. Notably, the integration of virtual court appearances, which has been commonplace since the COVID-19 pandemic, means that both attorneys and bankruptcy filers face fewer pitfalls when filing. Physically going to court can be a whole day ordeal, but online appearances are much simpler, quicker, and easier for all involved. As a result, bankruptcy attorneys can focus more time and effort on the important parts of your case.
Bankruptcy may not be the first option to consider when financial issues arise, but you should never write it off completely. With bankruptcies on the rise, the stigma some have about filing should hopefully dissipate, and those who need help in 2025 and beyond can have more confidence when starting the process.
If you are considering bankruptcy, talking to an experienced bankruptcy attorney is the fastest way to have your questions answered and learn more about your options. Contact Richard V. Ellis to schedule a consultation and discover how bankruptcy can help you get back on your feet.