The Challenge to the Bench and Bar Presented by the 2005 Bankruptcy Act: Resistance Need Not be Futile

Abstract:     
This article explores the initial reactions of the bench and bar to the 2005 Bankruptcy Act, enacted after an eight-year campaign by the consumer credit industry. Congress passed this legislation in a climate of unfair accusations against bankruptcy judges and debtors' lawyers, yet of course these actors then had to implement the law. The first part of the article categorizes early decisions of bankruptcy judges (on such matters as the new credit counseling requirement and the new debt relief agency provisions) in ascending order of effectiveness in resisting the worst intentions of the credit industry to throw up new hurdles even for honest but unfortunate debtors. Judges have been most effective when they have kept their eyes on serving the purported purposes of the act, abuse prevention and consumer protection. The second part of the article examines the activities of both individual lawyers and professional associations that have helped to keep the bankruptcy system running. Overall, despite the waste and chaos inflicted by the 2005 Bankruptcy Act, there is good news about professionalism in the early reactions of bench and bar to an extraordinary set of challenges.

Number of Pages in PDF File: 48

Keywords: bankruptcy, credit counseling, debt relief agency, regulation of the bar

JEL Classification: K2, K4

Accepted Paper Series