News
Analysis: Parents Who Borrowed for Children’s College Face Looming Deadline
On 4/9/26, the American Bankruptcy Institutes reports: Time is running out for parents who took out college loans for their children and want to keep affordable repayment and debt-forgiveness options, the New York Times reported. Because of new rules on student loans, parents who borrowed federal parent PLUS loans and want to keep monthly payments low need to apply soon to merge the loans into a new loan — a step known as consolidation. That will keep them eligible for a plan that bases monthly payments on their income, as well as for loan forgiveness programs. While the formal deadline…
Creditors Holding High-Ranking Debt
On 4/9/26, a bankruptcy newsletter reported that creditors holding high-ranking debt issued by companies that emerged from bankruptcy in 2025 faced the worst average recoveries on their investment in the past 10 years, as liability management exercises that supply firms with new financing put increased pressure on lenders, Fitch Ratings has said in a new report.
Representatives Reintroduce Bankruptcy Venue Reform Act in US Congress
Reps. Zoe Lofgren (D-Calif.) and Ben Cline (R-Va.) today introduced the “Bankruptcy Venue Reform Act,” bipartisan legislation that requires that chapter 11 proceedings take place where the principal place of business or principal assets of a company are located. The bill has been introduced in both chambers in previous sessions of Congress. “Bankruptcies should be adjudicated locally in a court familiar with all the affected stakeholders, not in some court all the way across the country,” Lofgren said. Cline agreed, adding that “[v]enue shopping erodes trust in the process and shuts out the very people most affected by these decisions.”…
ABI Applauds Renewed Congressional Efforts to Expand Access for More Distressed Small Businesses to Reorganize Under Subchapter V
On 3/26/26 The American Bankruptcy Institute (ABI) and ABI’s Subchapter V Task Force announced its support for bipartisan legislation that would restore and permanently increase the debt eligibility cap for subchapter V small business reorganizations to $7.5 million. The “Bankruptcy Threshold Adjustment Act of 2026” was recently introduced by Senate Pro Tempore and Senate Judiciary Committee Chair Charles Grassley (R-Iowa) and Rep. Ben Cline (R-Va.) in the House of Representatives. In a letter to the sponsors, co-sponsors and members of both the House and Senate Judiciary Committees, ABI and its Subchapter V Task Force emphasized that expanding access to subchapter…
Farms Facing Bankruptcy
Comment of The Bankruptcy Law Firm, PC, by KPMarch, Esq: Most people in urban areas in California are not aware that there is a huge amount of farming in California. In fact, the US Department of Agriculture reports that the state of California has the highest gross receipts from agriculture of any of the 50 states. As a result, stress on farming can have a big negative effect, not just on California farmers, but on the whole state of California. See the following March 4, 2026 Report of Caroline Weier KAALTV, KSTP KSTP, that between 2024 and 2025, 1,300 farms…
Trump administration identifies more borrowers eligible for student loan forgiveness, court filing shows
CNBC on 2/17/26 reports that: Key Points The Trump administration identified more than 40,000 borrowers eligible for federal student loan forgiveness in January, according to a recent court filing. Borrowers became eligible for the debt cancellation under the terms of their repayment plan or through Public Service Loan Forgiveness. “We have several clients who got the ‘golden email’ this month,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York. The Trump administration has identified more than 40,000 borrowers eligible for federal student loan forgiveness in January, a recent court filing revealed. More than 10,800…
Reduction in Regulation/Supervision/Oversight of “Payday” Loans
Credit & Collection e-newsletter of 12/23/25 reports reduction in regulation/supervision/oversight of “payday” loans (also known as “paycheck loans”, and “payday advance” loans). That reduction in regulation/supervision/oversight of “payday” loans creates a BIG RISK to people taking out such “payday advance” loans, to survive until their next paycheck, because the loan documents will not be clear regarding what interest rate/fees the lenders are charging on such loans: Here is the article: The CFPB has issued a new advisory opinion saying that most “earned wage” or paycheck advance products are not covered by the federal Truth in Lending Act (TILA), meaning many…
Student Loan Forgiveness
American Bankruptcy Institute (“ABI”) article reports that a Court filing alleges that the US Education Department is Moving Slowly on Student Loan Forgiveness, and has a large backlog of requests from student loan borrowers for income-driven repayment plans, to repay the borrowers US Dept of Education school loans: Plan Backlog The Trump administration continues to move slowly in processing a massive backlog of applications from hundreds of thousands of student loan borrowers seeking debt forgiveness or an affordable repayment plan, a new court filing shows, CNBC.com reported. As of the end of November, 802,730 requests to transfer into an income-driven…
American Bankruptcy Institute 10/9/25 e-newsletter reports Personal Bankruptcy Filings Soar Amid ‘Mounting Financial Pressure’
The number of individuals filing for bankruptcy has soared thus far in 2025, reflecting growing financial pressures and pessimism among Americans about their economic security, Newsweek reported. According to a report from the ABI, based on figures from data and analytics platform Epiq AACER, there were 249,152 individual chapter 7 bankruptcy filings — the most common type of personal bankruptcy — during the first nine months of 2025. This represents a 15 percent increase over the 216,773 filed in the same period last year. Epiq AACER linked the rise to the “mounting financial pressure” faced by Americans in 2025, reflected…
Many Banks are suffering Multi-Million Dollar Loses Due to Auto Lender Tricolor filing Chapter 7 Bankruptcy
Credit & Collection e-newsletter of 9/11/25 reports that Many Banks are suffering Multi-Million Dollar Loses Due to Auto Lender Tricolor filing Chapter 7 Bankruptcy Key Insight: Tricolor’s business model differed from other auto finance companies, which could have contributed to its problems. What’s at Stake: It’s unclear how many more lenders may take losses due to connections with Tricolor, or on subprime auto loans. Forward Look: A former Tricolor lawyer said the federal government is investigating the situation for alleged fraud. UPDATE: This story includes information from the FBI’s response to a request for comment. A subprime auto lender’s bankruptcy…