Let's all agree on one thing: there's no requirement that bankruptcy law in the United States be fair, or even rational. The Supreme Court supports the right of Congress to produce stupid laws, not unconstitutional laws, and Congress accordingly produces as many stupid laws as it can. Just to be polite.
In fact, Congress could abolish all bankruptcy law in the United States, entirely, and probably preempt the states from building their own.
But I digress, as I often do.
Today's discussion has to do with the irritation I feel about different treatment under bankruptcy laws being available to different people, for no good reason whatsoever (that is, a stupid law, with no relationship to the goals to be achieved).
Now, pre-2005 Amendments, the Bankruptcy Code was to a large extent a level playing field for debtors. Sure, you needed regular income to file a Chapter 13, and if your debts were higher than the limits at 11 USC 109, you couldn't file a Chapter 13 at all (or you might need to file a Chapter 20).
But now, I get to talk to honest debtors with overwhelming debt who are treated differently because of the means test. One debtor who makes a quarter of a million a year, who has primarily business debt, gets to file a Chapter 7, and get on with his life.
Another, with primarily consumer debt, might very well not have that option.
That distinction under the means test makes no sense.
And if anybody asks, no, there was substantially no abuse under the pre-2005 Amendments; NOBODY in their right mind ever filed a Chapter 7 for fun. And to the extent that anybody ever did file and treat the process in a frisky or funky way, the Bankruptcy Judges were more than capable of fixing their little red wagons!
So the 2005 Amendments, sometimes referred to as the BARF Act, will always be to me a solution in search of a problem.
In fact, Congress could abolish all bankruptcy law in the United States, entirely, and probably preempt the states from building their own.
But I digress, as I often do.
Today's discussion has to do with the irritation I feel about different treatment under bankruptcy laws being available to different people, for no good reason whatsoever (that is, a stupid law, with no relationship to the goals to be achieved).
Now, pre-2005 Amendments, the Bankruptcy Code was to a large extent a level playing field for debtors. Sure, you needed regular income to file a Chapter 13, and if your debts were higher than the limits at 11 USC 109, you couldn't file a Chapter 13 at all (or you might need to file a Chapter 20).
But now, I get to talk to honest debtors with overwhelming debt who are treated differently because of the means test. One debtor who makes a quarter of a million a year, who has primarily business debt, gets to file a Chapter 7, and get on with his life.
Another, with primarily consumer debt, might very well not have that option.
That distinction under the means test makes no sense.
And if anybody asks, no, there was substantially no abuse under the pre-2005 Amendments; NOBODY in their right mind ever filed a Chapter 7 for fun. And to the extent that anybody ever did file and treat the process in a frisky or funky way, the Bankruptcy Judges were more than capable of fixing their little red wagons!
So the 2005 Amendments, sometimes referred to as the BARF Act, will always be to me a solution in search of a problem.
Leave a comment