Biden’s Unconstitutional “Bankruptcy Abuse” Act Makes Peons of Student Debtors

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The law prohibits education loans from being discharged through bankruptcy. It should be repealed to provide relief.

The typical Black family lacks wealth and thus relies more on debt to attend college than white households do. In 2016 the Brookings Institutethat Black students who graduated from college in 2008 owe $7,400 more, on average, than their white peers do. Furthermore, Black students owe an average of $52,726 four years after graduation — compared to $28,006 for the average white student. Usurious interest rates as high as 28 percent contribute to this huge discrepancy.

Properly understood, Congress’s 13th Amendment power to pass “appropriate legislation” supplements its Article I bankruptcy power. Joseph Simmons’s 2021 law review article,explains how the 13th Amendment established the merchant-citizen paradigm which “reconstructed” the bankruptcy power. He shows how bankruptcy law evolved into the right to a fresh start.

Notwithstanding the Act of 1841, bankruptcy law was a creditor remedy against merchant debtors before the Civil War. The 13th Amendment made it the fundamental policy of federal bankruptcy law to grant the honest debtor a fresh start. Enter the Bankruptcy Act of 1867. According to Thompson, Southerners lost two-thirds of the value of their property from the war. Half their loss was the result of the emancipation of 4million formerly enslaved persons who, in 1860, had been worth almost $4 billion. The South was in economic shambles.

 

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