× Expand Chris Carlson/AP Photo Democratic presidential candidates Senator Elizabeth Warren, left, and former Vice President Joe Biden stand on stage during a break at a presidential primary debate, December 19, 2019, in Los Angeles.

One of the bigger “dog that didn’t bark” moments of this Democratic primary has been the long-expected skirmish between Elizabeth Warren and Joe Biden over the 2005 bankruptcy bill. Entire long features—lots of them!—have been penned in anticipation of the moment. Warren staked her campaign on being the plans candidate, so surely she would unveil a plan for overhauling bankruptcy laws, as a prelude to the fight over Biden’s leadership role in “reforming” the process (read: making it more finance-friendly) 15 years ago.

Amazingly, it took until the calendar flipped to 2020 for this to occur. Warren, who built her whole law career through understanding bankruptcy, has never since entering the Senate unveiled a comprehensive policy, though she’s introduced a couple of important bills to reform parts of the system. But today, in the critical final month before caucuses open in Iowa, Warren has released a bankruptcy plan that, though it doesn’t mention Biden by name, is designed to challenge his record of selling out working families in the name of financial interests.

The story of the bankruptcy bill is familiar—legislation with no constituency other than the credit card executives that predominate Delaware, thanks to race-to-the-bottom deregulation that opened the state up to the corporate elite. The industry spent nearly a decade working the political system to secure new rules making it harder for poor borrowers to escape their debts, and Biden was the point person for the effort. Warren became an outside agitator to stop the bill from becoming law, and nearly succeeded—challenging Biden in hearings and publicly calling him out for “his energetic work on behalf of the credit card companies.”

Warren’s plan, released at her Medium page, seeks to reverse the worst aspects of the bankruptcy bill, making it once again an equitable system where everyone can obtain a second chance. But the fact that it highlights Biden’s meritorious service on behalf of creditors is never far from the page.

First off, the plan doesn’t start by listing ideas for fixing bankruptcy, instead recounting the entire story of the bankruptcy bill fight—the $100 million in corporate lobbying to get the bill passed, the false starts and successful outflanking of the industry until the 2005 passage, the immediate 50 percent drop in bankruptcy filings in the aftermath, the 800,000 mortgage defaults and 250,000 foreclosures that resulted. Before identifying solutions, the Warren plan targets the problem—and Biden—directly.

Why was the Biden bankruptcy bill such a failure? First of all, it made accessing bankruptcy incredibly difficult for people without money, a perverse scenario. A means test puts those earning above their state’s median into the more expensive Chapter 13 process, where wages are garnished and debtors pay more on net. The cheaper Chapter 7 process requires an up-front cash outlay, which the bankrupt can ill afford, against funneling them into the costlier Chapter 13. Filers must submit months of old pay stubs and other paperwork, while their attorneys must certify all debtor disclosures, adding significant costs and effort. Even before filing, all individuals must take credit counseling, which is of dubious value.

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The lengthier time frame just to get to bankruptcy, known colloquially as the “sweatbox,” not only locks many debtors out of the process, it makes those who do opt for bankruptcy pay more, which coincidentally benefits the industry and its hangers-on.

Warren’s plan would allow debtors to choose the system that best fits their financial situation, lower the paperwork burden, strike the up-front Chapter 7 cash payment provision, and eliminate the credit counseling requirement. In fact, it would waive filing fees for anyone under the poverty level.

The plan also unearths amendments that Biden and his colleagues voted down during the debate over the 2005 bankruptcy bill, at the behest of the industry. One rejected amendment allows renters to continue paying rent in bankruptcy and avoid eviction and homelessness. Another allows parents to spend an allotment on their children during bankruptcy and allows union members to pay their dues.

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The bankruptcy bill, and other laws passed before it, places particular hardships on certain debtors. Reinforcing that student loans keep college graduates in servitude like medieval indentures, student debts cannot be discharged in bankruptcy unless an “undue hardship” can be shown, which is nearly impossible in practice. Mirroring a bipartisan bill Warren introduced last May, her plan makes student loans dischargeable. Warren also has a student debt forgiveness plan, but this mops up leftover debt for those who cannot pay.

More important, the plan lets borrowers modify primary residence mortgages in bankruptcy, a concept known as “cram-down” that the Obama-Biden administration (to borrow Biden’s common terminology) openly fought against after promising to enact it. This would have significantly mitigated the foreclosure crisis, giving borrowers a fair shot at a clean slate and equitably sharing the losses from the collapse.

Other provisions include a federal homestead exemption that protects some home equity in bankruptcy; a pre-packaged mortgage bankruptcy option to cut through the tangle of claims in securitized loans; the repeal of a 2005 rider forcing debtors to pay the full amount of their initial car loan to retain their automobiles, regardless of the current blue-book value; and proposals to ensure racial and gender equity in bankruptcy.

Finally, though the bankruptcy bill is known for its crackdowns on poor and middle-class bankruptcy filers, it also widened or kept open loopholes that enabled the rich to abuse the system. This is maybe the most galling thing about that bill; Biden and his allies framed it as a way to reduce overuse of bankruptcy, while keeping in the parts for the least deserving to do exactly that.

Though the bankruptcy bill is known for its crackdowns on poor and middle-class bankruptcy filers, it also widened or kept open loopholes that enabled the rich to abuse the system.

A so-called “millionaire’s loophole” lets the wealthy hide assets in trusts to avoid the bankruptcy process. Deadbeat dads use trusts to sidestep alimony, and scions of the rich use so-called “dynasty trusts” to avoid creditors. All of that would end if the Warren plan passed.

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The proposal reflects the best ideas in consumer bankruptcy reform, which makes sense because it comes from one of the nation’s leading bankruptcy advocates. But the connections to the 2005 law indicate that some candidates will use the final month before voting to finally draw significant distinctions with Biden on his record. Bernie Sanders has already signaled this, telling The Washington Post on January 2 that Biden would bring to the general election “a record which is so weak that it just cannot create the kind of excitement and energy that is going to be needed to defeat Donald Trump.”

While Warren avoided a frontal assault on Biden, putting out a bankruptcy plan right now, and framing it as repealing the worst of the 2005 law, is functionally the same tactic. Adam Green of the Progressive Change Campaign Committee, a surrogate for the Warren campaign, led with the Biden connection in his commentary on the plan. “When thinking about electability, it would be complete malpractice to nominate someone who conspired in backrooms for years with credit card lobbyists and voted for every corporate bankruptcy bill, Wall Street deregulation, and trade deal that voters hate,” Green says. “Biden would ironically cede the outsider mantle to a corrupt incumbent president.”

Without taking Biden down a notch on electability, he will be extremely tough to beat. That’s his core advantage in the race. Biden’s record could serve as a proxy for understanding who best meets the challenge of taking on Donald Trump. The days of Biden avoiding this confrontation have ended.