The (Belated) AALS Report

Contrary to popular belief, the regular Credit Slips bloggers are not being held for ransom by guest blogger Jack Ayer. When we set this up, Ayer kindly offered to start last week when law school academics tend to have their attention turned elsewhere. And, where else are law school professors the first week in January except the annual meeting of the Association of American Law Schools (a/k/a "the AALS") in Washington, DC? I had promised to report in from the event, but the Internet connection in my room did not want to work. Other than that and the small fire at 2:15 AM in the morning that caused an evacuation of my part of the building, the hotel was great.

For those fortunate enough never to have known the AALS meeting, a little background is in order. It meets over three and a half days. The first day is typically turned over to a plenary event that would be of interest to all--this year it was law school rankings--and the rest of the meeting is dominated by small section meetings organized by subject-matter specialty. For Credit Slips readers, the most germane section is the one on Creditors' and Debtors' Rights. (I've seen others refer to it as the Section on Debtors' and Creditors' Rights--all depends on your perspective.) There were four papers presented at the section meeting from Ed Morrison (Columbia), Robert Chapman (visitor, Baltimore), Cre Johnson (Ohio State), and Adam Feibelman (North Carolina). So what is on the minds of bankruptcy academics?

Morrison has a great paper in progress on the decisions of financially distressed small businesses to seek bankruptcy protection. He has made tremendous strides on a problem that has plagued all of us for years--finding data on financially distressed small businesses that do not file bankruptcy--by getting access to Dun & Bradstreet data. Morrison confirms that bankruptcy is rare, most financially distressed businesses do not file bankruptcy. The percentages were higher than I would have thought, but my baseline was pretty low.

Chapman is looking at wage earner plans from 1930-era Birmingham, Alabama, which were the forerunners of today's modern chapter 13. He has some interesting data about race and choices for consumer credit, including a finding that the wage earner plans were a precondition for some merchants before they would extend credit to African Americans during that era.

Johnson talked to us about how to encourage more financial literacy classes in the high schools, drawing an analogy to the Cold War era's emphasis on physical fitness. She wants us to take on financial literacy in the same spirit. Ray Warner (St. John's) asked whether the push for financial literacy would give the consumer credit industry an excuse to ward off direct regulation. If consumers should be educated not to use certain credit products, isn't the better answer to regulate or bar those particular products?

Feibelman is working on a topic that I hesitate to mention given its somewhat controversial appearance on this blog. What the heck, blogs are for controversy. Feibelman is thinking about assignee liability for predatory lending and comparing assignee liability to other three-party disputes (e.g., bailments).

The brief descriptions above do not do justice to the papers. If they find this post, perhaps Morrison, Chapman, Johnson, and Feibelman could elaborate in the comments. Finally, we have to thank Nathalie Martin (New Mexico) for her kind words about Credit Slips in her introductory remarks as section chair. It's nice to know that someone is reading all this stuff.

Comments

[Javier]

Hey!, I DO read it, even if I do not comment :-D.

Greetings form the outer space (EU)

[anonymous]

IMO, the "debt buying industry" ought to be not just regulated, but shut down entirely. I, as an average consumer, was not even aware that such an industry exists. Most news outlets and media do not report any of this - harrasing collectors having people surveilled and followed, digging into your personal financial affairs, setting up bogus credit offers to try and lure people out, making threating calls and mailings, etc. etc. And all for debts that have been charged off as losses, and aren't really owed to anyone. Many people are just people who got caught in bad life circumstances and are trying to climb out of a hole so to speak and start over. This sort of stuff doesn't help. Am I alone in my thinking? To me, the whole concept of this is messed up, and wrong. It shouldn't even exist.