Warren's new bankruptcy plan may spark a clash with Biden

WASHINGTON (AP) — Sen. Elizabeth Warren is promising to remake the nation’s consumer bankruptcy system if elected president, returning to her political roots while also potentially picking a fight with a top rival for the Democratic nomination, former Vice President Joe Biden.

The Massachusetts senator on Tuesday unveiled a plan she said would make the process of declaring bankruptcy easier and cheaper for many Americans with debts they can’t pay. It also would largely undo a 2005 law that was backed by Biden and financial industry interests with a lot of political clout in his home state of Delaware. Warren, then a bankruptcy expert and professor at Harvard Law School, clashed with then-Sen. Biden while the law was being debated in Congress — a dust-up she reference in announcing her new plan.

“By making it harder for people to discharge their debts and keep current on their house payments, the 2005 bill made the 2008 financial crisis significantly worse: experts found that the bill ‘caused about 800,000 additional mortgage defaults and 250,000 additional foreclosures,’” Warren wrote in an online post. “And despite the claims from the industry and their allies in Congress that the 2005 bill would reduce credit card costs across the board for consumers, the cost of credit card debt went up too.”

“I lost that fight in 2005, and working families paid the price,” she added.

It’s a sign that Warren is seeking to shift focus to domestic policies that have made her the candidate who “has a plan” for top issues at a time when the 2020 campaign could be consumed by rising U.S. tensions with Iran. That's potentially a strength for Biden given his experience with foreign policy in the Senate and the Obama administration.

Biden was set to speak Tuesday in New York about President Donald Trump’s...