Bankruptcy Law Commons^™

The Consumer Bankruptcy Fee Study: Final Report, Lois R. Lupica

Faculty Publications

The Consumer Fee Study’s primary objective is to identify and monetize these costs of bankruptcy access through the analysis of quantitative and qualitative data gathered from court dockets and from professionals working within the bankruptcy system. We began the quantitative section with the hypothesis that following BAPCPA’s enactment, the cost of accessing the consumer bankruptcy system increased. We set out to determine the degree of increased costs, as well as to identify the specific policies and practices affecting these costs. Additionally, we endeavored to evaluate, with specificity, how diverse local procedures and guidelines impact the system’s processes and outcomes. Our …

Misbehavior And Mistake In Bankruptcy Mortgage Claims: Some Caveats Regarding The Porter Study, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

This Article reviews the comprehensive empirical study of the bankruptcy mortgage foreclosure process conducted by Professor Katherine Porter and subsequently published in 2008 in the Texas Law Review. The results of her study, which analyzed 1,768 proof of claim submissions filed in a sample of 1,733 Chapter 7 bankruptcy proceedings, strongly suggest that there is a pervasive failure on the part of mortgage creditors to meet all of the formal documentation requirements for filing such bankruptcy claims. This documentation failure arguably impedes many mortgage debtors or bankruptcy trustees from reviewing these claims for their accuracy.

Porter's conclusion that the itemization …

Cleaning The Mess Of The Means Test: The Need For A Case-By-Case Analysis Of 401(K) Loans In Chapter 7 Bankruptcy Petitions, Luke Welmerink

Golden Gate University Law Review

This Comment examines the relevant case law regarding Chapter 7 petitions and the policy implications of not considering 401(k) loan repayment a necessary expense. Section II provides an overview of the treatment of 401(k) loans in bankruptcy, as well as a more detailed review of means testing and an analysis of Other Necessary Expenses. Section III argues that courts should look to the facts and circumstances surrounding petitions to determine whether 401(k) loan repayments can be deducted as necessary expenses, and that doing so will not affect the ability of courts to properly dismiss abusive petitions under a totality-of-the-circumstances analysis. …

The Case Against "Bad Faith" Dismissals Of Bankruptcy Petitions Under 11 U.S.C. § 707(A), Pamela C. Tsang

American University Law Review

No abstract provided.

The Costs Of Bapcpa: Report Of The Pilot Study Of Consumer Bankruptcy Cases, Lois R. Lupica

Faculty Publications

Substantial changes were made to the consumer bankruptcy system with the enactment of BAPCPA. These changes, however, were enacted without data support for, or recognition of how such changes would affect the cost of accessing the bankruptcy system. The Costs of BAPCPA Pilot Study undertook a review of the costs of the consumer bankruptcy system following BAPCPA's enactment, to determine if costs were increased, and if so, whether these costs were passed on to the consumer. The issue of "costs" distills the question of what attorneys are charging consumers to represent them under the new regime. Thus a study of …

Interpreting Data: A Reply To Professor Pardo, Robert M. Lawless, Angela K. Littwin, Katherine M. Porter, John A. E. Pottow, Deborah K. Thorne, Elizabeth Warren

Articles

Professor Pardo has published a pointed critique to our Report, raising three major complaints. First, he claims that we make two predicating assumptions in our study that are flawed. Second, he contends that we misunderstand the means test and fail to appreciate with sufficient "nuance" its "operative effect." Third, he maintains that our Report suffers from methodological problems. We can address the two impugned assumptions quickly. The first one - that BAPCPA's means test is the sole causal agent driving 800,000 putative filers from the bankruptcy courts - is not one we make. The second - regarding the income profiles …

The Success Of Chapter 11: A Challenge To The Critics, Elizabeth Warren, Jay Lawrence Westbrook

Michigan Law Review

Although Chapter 11 has served as a model for bankruptcy reform around the world, the conventional wisdom has been that it is characterized by a relatively low success rate and endless delay. The data from large samples of Chapter 11 cases filed in 1994 and 2002 demonstrate that this characterization is wrong. Nearly all troubled companies choose Chapter 11 over Chapter 7 liquidation, which means that the system serves a critical screening function to eliminate hopeless cases relatively quickly. Almost half the unsuccessful cases were jettisoned within six months and almost eighty percent were gone within a year The cases …

2005: A Consumer Bankruptcy Odyssey, Gary Neustadter

Faculty Publications

Congress has concluded that the voyage of consumer bankruptcy in the United States is off course and that some of its crew - consumer bankruptcy attorneys and bankruptcy judges - no longer can be completely trusted at the helm. Following years of drama reminiscent of the 1914 silent film serial "Perils of Protection Act of 2005 ("the Act"). Save perhaps the 1938 introduction of Chapter XIII, the correction presents the most far reaching changes in consumer bankruptcy law since the adoption of the Bankruptcy Act of 1898. These changes come little more than a decade after Congress established a National …

Abuse Prevention 2005, James J. White

Articles

Today I do not debate the empirical question (what is the cause of the increase in bankruptcy filings?) nor do I address the buried moral question (who deserves the protection of bankruptcy law?). Rather, I speculate about the consequences of 2005 amendments to the Bankruptcy Code and about the reasons it will achieve or fail to achieve the goals of its sponsors. Along the way I hope to learn something about how law changes, or fails to change behavior.

The Totality Of The Circumstances Of The Debtor's Financial Situation In A Post-Means Test World: Trying To Bridge The Wedoff/Culhane & White Divide, John A. E. Pottow

Articles

Bankruptcy Judge Eugene Wedoff and Creighton Law School professors Marianne Culhane and Michaela White engage in a spirited debate over a series of law review articles about the proper scope of motions to dismiss a debtor's petition under section 707(b) of the freshly revised Bankruptcy Code. It is an interesting and provocative dialogue, with both sides advancing their respective positions persuasively. As a result, I find myself in the unfortunate position of wanting to agree with both. Since that is impossible, however, this brief article is my attempt to find a middle ground between their two positions. It does so …

Section 365 In The Consumer Context: Something Old, Something New, Something Borrowed, Something Blue, Michael G. Hillinger, Ingrid Michelsen Hillinger

Faculty Publications

The § 365 consumer debtor case law has a further complication. Much of it arises in the context of the last great bankruptcy frontier, Chapter 13. Until recently, Chapter 11 has occupied the minds and hearts of courts and attorneys. Not any more. And, as attorneys and courts take a closer, harder look at Chapter 13, it is no longer possible to describe it as a “streamlined creditors-can’t-vote Chapter 11”. Chapter 13 is unique, presenting its very own quandaries, not the least of which is how its provisions and § 365 interact. We live in interesting times.

Election Of Chapter 7 Trustees Under The Bankruptcy Code , Darrell Dunham

Cleveland State Law Review

This article offers an analysis of the election of chapter 7 trustees. Part II the prior statutory scheme and the legislative history supporting the present statute. Part III examines the present statute, discussing the statutory requirements for the election of a chapter 7 trustee. Part IV discusses election procedures. The bankruptcy rules mandate a prescribed set of procedures for elections, including procedures for disputing the results of an election. These rules and the cases applying them are discussed in Part IV. In Part V, appellate reviewed is examined. This section analyzes questions such as standing and appealable orders. Finally, in …

How Fresh A Start?: What Are "Household Goods" For Purposes Of Section 522 (F)(1)(B)(I) Lien Avoidance?, Michael G. Hillinger

Faculty Publications

What do camcorders, walkman players, personal computers, stereo components, firearms, chain saws, lawn and garden tools, bicycles, and video game machines have in common?

Well, they are all the things one might find in the typical American home. Although not necessarily cheap to buy new, such items generally do not retain value over time. They frequently serve as collateral for nonpurchase money loans. In a bankruptcy context, they share another characteristic; courts have had to decide if they are household goods such that a debtor is able to avoid a nonpossessory, nonpurchase money security interest in them. Indeed, over 270 …

Consumer Bankruptcy Practice In Kentucky: Chapter 7 Practice, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, Scott A. Bachert, Michael L. Baker, C.R. Chip Bowles Jr, Thomas L. Canary Jr, Sandra D. Freeburger, Hal D. Friedman, Joseph J. Golden, James D. Lyon, Andrea Fried Neichter, Cathy S. Pike, Jan M. West, Tracey N. Wise

Continuing Legal Education Materials

A handbook for Kentucky practitioners covering Chapter 7 debtors, automatic stay and abandonment, dealing with secured creditors, discharging debts, bankrupt estates, and bankruptcy ethics.

Should We Abolish Chapter 11? The Evidence From Japan, Theodore Eisenberg, Shoichi Tagashira

Cornell Law Faculty Publications

Optimizing reorganization proceedings for small and midsized businesses is an important issue in every industrial country. But little information exists about the actual operation of such proceedings. Recent U.S. bankruptcy studies focus either on consumer bankruptcies or on large Chapter 11 cases involving publicly listed firms. This article presents the results of a comprehensive empirical study of Japan's most frequently used business bankruptcy reorganization provision. Small and midsized reorganizations have become important for several reasons. First, unlike large firms, the vast majority of small businesses fail to obtain confirmation of a Chapter 11 plan and end up in liquidation, thus …

Property Of The Bankruptcy Estate After A Conversion From Chapter 13 To Chapter 7: The Need For A Definite Answer, Robert J. Volpi

Indiana Law Journal

No abstract provided.

Erisa: Anti-Alienation Superiority In Bankruptcy, George Lee Flint Jr

Faculty Articles

Both ERISA and the Bankruptcy Code consider the issue of debtor-participant’s interest in certain pension trusts when an action has been undertaken against the bankrupt debtor participant’s estate. Many jurisdictions have offered conflicting views on the handling of the interest. These conflicts create litigious interpretation and choice of law problems and place plan administrators at risk for breach of fiduciary duty depending on jurisdictional interpretation. Paying-out a bankruptcy trustee’s turnover demand could affect the tax qualified status of the pension plan, thereby hurting all plan participants. ERISA’s preemption provision was drafted to create uniformity among the states in interpreting employee …

Contract Excuse And Bankruptcy Discharge, Robert A. Hillman

Cornell Law Faculty Publications

No abstract provided.

Foreword, Frank R. Kennedy

Indiana Law Journal

Symposium: As We Forgive Our Debtors

Has The Time Come To Repeal Chapter 13?, William C. Whitford

Indiana Law Journal

Symposium: As We Forgive Our Debtors

Women In Bankruptcy And Beyond, Zipporah Batshaw Wiseman

Indiana Law Journal

Symposium: As We Forgive Our Debtors

The Role Of Empirical Data In Developing Bankruptcy Legislation For Individuals, Marjorie L. Girth

Indiana Law Journal

Symposium: As We Forgive Our Debtors

As We Forgive Our Debtors In The Classroom, Douglass Boshkoff

Indiana Law Journal

Symposium: As We Forgive Our Debtors

Bankruptcy Valuation Under Selected Liquidation Provisions, Steven L. Pottle

Vanderbilt Law Review

Chapter 7 of the Bankruptcy Code' (the Code) serves a distributive function; it is designed to distribute equitably a debtor's assets from the bankruptcy estate to creditors. All nonexempt as-sets owned by a debtor at the time of filing a petition for bankruptcy become part of the bankruptcy estate and subsequently are distributed to creditors. Generally, debtor transactions prior to the filing escape the purview of Chapter 7. If, however, a debtor distributes assets during the applicable statutory period, giving preference to some creditors' or defrauding other creditors,' the Code empowers the bankruptcy trustee to avoid those transfers.After filing, a …

Section 707(B) Of The Bankruptcy Code: A Roadmap With A Proposed Standard For Defining Substantial Abuse, David L. Balser

University of Michigan Journal of Law Reform

This Note examines these questions and proposes a standard for determining "substantial abuse." Part I provides an overview of Chapter 7 of the Bankruptcy Code. Part II discusses the legislative history of section 707(b). Part III examines the jurisdictional and procedural questions raised by the section and attempts to define what Congress meant by "primarily consumer debts" and "on [a court's] own motion." Part IV proposes a two-part standard for determining "substantial abuse." This standard suggests that courts should find "substantial abuse" whenever a debtor acts in bad faith or is able to repay 100% of his debts over the …

Title Iii Of The Bankruptcy Amendments Act Of 1984: The Substantive Changes, Lucinda Mcdaniel

University of Arkansas at Little Rock Law Review

No abstract provided.

Efficiency Justifications For Personal Property Security, James J. White

Articles

In February of 1983 Pan American World Airways issued 100 million dollars of convertible secured notes. As security for these notes it put up three Boeing 747 SP aircraft, two 747-100 aircraft, and one McDonnell Douglas DC10-30. The appraised value of these aircraft was 157 million dollars. To the extent possible under the law, Pan American made these aircraft subject to the claims of the owners of the new notes. On default, the note holders would have the first claim on these aircraft, would have the right to repossess them outside of bankruptcy, and would have the right to the …

Creditor Acquiescence As A Defense To An Exception To Discharge In Bankruptcy, Elizabeth Gavit Filipow

Indiana Law Journal

No abstract provided.