The "Great American Consumer Bankruptcy Outline" — a 102 page treatise on consumer bankruptcy case law developments in the past year — is now (thankfully) complete. Special thanks to my wife and two children, without whose unwavering support, this project never would have been completed.
This first post, corresponding to Part I, Section A of the Outline is titled: "Judicial Commentary on BAPCPA: Venting." This section points to 7 cases over the past year where bankruptcy judges, with varying levels of frustration, told us what they really thought about BAPCPA. [NB: Thanks to Professor Jean Braucher who coined the term "venting" in describing some judicial reactions to BAPCPA.]
Links are to Westlaw. Those who do not have access to Westlaw may contact me directly if they would like to view a particular case, though all federal courts maintain their own websites where judicial opinions may be accessed by the public free of charge (e.g., Bankr. N.D. Ill. – Judge Wedoff opinions). Because all the outline’s case references identify the deciding judge, you should be able to find the opinions online with minimal effort.
Thanks for reading. I’ve updated the table of contents here.
I. Judicial Commentary on BAPCPA
1. The relevant provisions of the post-Act Code are clumsily drafted. "Among other things, the phrase ’after notice and a hearing,’ applied to a motion for an extension of the stay, inexplicably appears twice in the same sentence in § 362(c)(3)(B), with reference to the same stage in the same procedure." In re Collins, 334 B.R. 655 (Bankr. D. Minn. 2005) (Kishel, J.).
2. "To call the act a ‘consumer protection’ act is the grossest of misnomers… Those responsible for the passing of [BAPCPA] did all in their power to avoid the proffered input from sitting United States Bankruptcy Judges, various professors of bankruptcy law at distinguished universities, and many professional associations filled with the best of the bankruptcy lawyers in the country as to the perceived flaws in the Act. This is because the parties pushing the passage of the Act had their own agenda. It was apparently an agenda to make more money off the backs of the consumers in this country…. It should be obvious to the reader at this point how truly concerned Congress is for the individual consumers of this country. Apparently, it is not the individual consumers of this country that make the donations to the members of Congress that allow them to be elected and re-elected and re-elected and re-elected." In re Sosa, 336 B.R. 113 (Bankr. W.D. Tex. 2005) (Monroe, J.).
3. BAPCPA production of an "unpopular and perhaps even burdensome result" does not automatically necessitate courts to fashion a judicial remedy. In re Rodriguez, 336 B.R. 462 (Bankr. D. Idaho 2005) (Myers, J.).
4. "The Court has no discretion to waive the credit counseling certificate requirement or to grant an exemption and extension unless a certification satisfying all three requirements is filed by the debtor…. It is a mystery to the Court why Congress granted the Court the authority to waive all filing fees for persons such as the Filer, but not waive the credit counseling requirement. The Filer qualified for a waiver of fees which means the Court and the chapter 7 trustee would have received no payment for the processing of the Filer’s bankruptcy case. However, the credit counseling agency would still receive payment for a counseling session. Exactly what form of credit counseling could be useful, or necessary, to a person who qualifies for a waiver of fees under 28 U.S.C. § 1930(f) is even more of a mystery. The rationale for many of the provisions in BAPCPA, the language used in those provisions, and the coordination among them are likely to remain an enigma for a long time." In re Raymond, 2006 WL 1047033 (Bankr. D.N.H. 4/12/06) (Deasy, J.).
5. "As the House Report explains, BAPCPA is a comprehensive package of reform measures pertaining to both consumer and business bankruptcy cases. The purpose of the bill is to improve bankruptcy law and practice by restoring personal responsibility and integrity to the bankruptcy system and ensure that the system is fair for both debtors and creditors. [FN 4: This statement, in the context of BAPCPA’s creditor-friendly language throughout, aptly illustrates the tone and substance of BAPCPA-it is to remedy a perceived imbalance in the Code favoring debtors. Regardless of whether that perception was accurate or not, Congress clearly adjusted the perceived imbalance in favor of creditors.] With respect to the interests of creditors, the proposed reforms respond to many of the factors contributing to the increase in consumer bankruptcy filings, such as lack of personal financial accountability, the proliferation of serial filings, and the absence of effective oversight to eliminate abuse in the system. Congress noted, in particular, one academic’s statement with respect to the new law: ‘[S]hoplifting is wrong; bankruptcy is also a moral act. Bankruptcy is a moral as well as an economic act. There is a conscious decision not to keep one’s promises. It is a decision not to keep one’s promises. It is a decision not to reciprocate a benefit received, a good deed done on the promise that you will reciprocate. Promise-keeping and reciprocity are the foundation of an economy and healthy civil society.’ (Statement of Professor Todd Zywicki). It would seem it is with this lens that Congress viewed debtors – as moral equivalents to “shoplifters”- in enacting BAPCPA. In so doing, it created a law that is sometimes self-executing, inflexible, and unforgiving. 11 U.S.C. § 521(i) is just one of those provisions." In re Ott, — B.R. — (Bankr. D. Colo. 2006) (Brooks, J.).
6. "The limited automatic stay for repeat filers is a major feature of BAPCPA which was passed by Congress at the behest of the credit industry, and especially the mortgage servicing companies and the law firms they retain to represent them need to adapt their practices in order to deal with what they have created." In other words, the problems with the statute are of the lobby’s own doing; they’ll just have to deal with problems spawned from language that doesn’t comport with what they may have intended. In re Frazier, 339 B.R. 516 (N.D. Fla. 2006) (Killian, J.).
7. "The language of Section 1325(b) is unambiguous in requiring that the expenses and deductions of above-median-income debtors be determined under section 707(b)(2)(A) and (B). When the language of a statute is plain, the sole function of the courts is to enforce the statute according to its terms unless the disposition required by the text is absurd. While many sources question whether sections 707(b)(2) and 1325(b) represent a fair and effective approach to catching the abusers of the bankruptcy system or to insuring that debtors who can pay do pay, the court does not believe that the result in this case of applying section 1325(b)(3) as written can be rejected as being absurd. Therefore, even if the Trustee’s criticism of section 1325(b) is correct, this court is not free to ignore revised section 1325(b) or replace it with a standard pulled from section 1325(a)(3). To do so, the court believes, would impermissibly undermine policy choices made by Congress. ‘There is a basic difference between filling a gap left by Congress and rewriting rules that Congress has affirmatively and specifically enacted.’ Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625 (1978). While there may be sound reasons to rewrite section 1325(b), it is not the role of this court to do so." In re Barr, 341 B.R. 181 (Bankr. M.D.N.C. 2006) (Stocks, J.).
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