October 16, 2025

In the recent case U.S. v. Miller (2025), the Supreme Court significantly limited trustees’ powers to assert avoidance/fraudulent transfer claims under certain circumstances—especially for state law claims against federal entities with sovereign immunity. See https://www.supremecourt.gov/opinions/24pdf/23-824_2d93.pdf.

Meanwhile, the proposed Consumer Bankruptcy Reform Act of 2025 could further shift the landscape. If passed, it may delay or restrict creditor actions on delinquent accounts, including for mortgages and landlord claims. It may also increase incentives for borrowers to use bankruptcy protections under tightened hardship thresholds.

For creditors and lenders, these changes highlight the need for more proactive risk assessment. Legal teams should monitor how courts interpret Miller and follow the Act’s progress. Entities should also consider the review of internal policies for defaulted or delinquent accounts to ensure they align with evolving legal constraints.