Adapting to BAPCPA
90 ABLJ 183 (2016)
52 Pages Posted: 15 Jul 2016
Date Written: May 1, 2016
Consumer bankruptcy and its practice still exist, despite the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which could have been a catastrophe for the system. As part of the National Conference of Bankruptcy Judges’ Symposium, BAPCPA at 10, this Article presents data from interviews I conducted with fifty-three consumer bankruptcy attorneys about BAPCPA, and a significant minority of my interviewees described fearing the worst. Some of their fears materialized, but many did not. And in general, the sky did not fall on bankrupt consumers or their attorneys. This Article begins answering the question of how consumer bankruptcy survived. The attorneys I interviewed employed a few key strategies to adapt to BAPCPA. These included deploying technology, developing thorough processes and procedures, delving into learning the then-new law, and investing in staff. The overall picture that emerged was one of lawyers doing whatever it took to make their practices work. In addition, other system actors played key roles. Judicial interpretations of provisions such as the limited stay for repeat filers and the new attorney sanctions mitigated BAPCPA’s potential damage. The United States Trustee decision to allow a new type of credit counseling to emerge and a lack of enforcement regarding the “debt relief agency” provisions contributed as well.
But my findings are not all positive. Not only did the cumulative effect of BAPCPA’s procedural barriers drive up attorney fees, but the attorneys’ adaptations also contributed to the steep increases. And recent research suggests that increased access costs may be exerting downward pressure on the number of consumer bankruptcy cases — not only immediately after BAPCPA’s enactment but also during the high-filing years of the financial crisis and those that followed. Now that additional factors are depressing filings, the attorneys in my study are experiencing a loss of business. A few are in dire straits. Should the low-filings trend continue, BAPCPA’s long-term effect may, in fact, be the decimation of consumer bankruptcy practice, a development that would significantly harm the bankruptcy system and the struggling consumers it serves.
Keywords: bankruptcy, consumer law, BAPCPA, attorneys
JEL Classification: G33, D18
Suggested Citation: Suggested Citation