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Beyond Bankruptcy

posted by Katie Porter

As my semester-long bankruptcy class ends, I've started reflecting on coverage of topics. Bob Lawless inquired earlier this year whether many schools were going to a 4-credit bankruptcy course in part to accomodate the additional complications of BAPCPA. I have a different query. What law "beyond bankruptcy" or "besides bankruptcy" should students who want to be bankruptcy practitioners learn?

The standard answers are probably Corporations/Business Associations and Article 9. Indeed, the Honorable Bruce Markell's opinion in In re Schwalb, 347 B.R. 726 (2006) is a nice reminder that knowing Article 9 can be a substantial help to a consumer bankruptcy client who lives in a state that hasn't outlawed auto-title loans. What other laws do consumer or business bankruptcy attorneys need to know? In which law school courses, if at all, do they get taught? Should we be teaching more of these topics? In other words, has the broadening of bankruptcy coverage cut too far into coverage of state debtor-creditor law? Or has the rise of more federal regulatory regimes mean that attorneys need to know more "generally applicable non-bankruptcy law" to help financially distressed consumers or businesses? For example, the results of the empirical study on mortgage claims that I've been working on convince me that bankruptcy attorneys could do more for their home-owner clients if they were familiar with RESPA (real estate settlement procedures act) and TIL (truth in lending act.) Other ideas?


Doesn't this really depend on whether one is aiming to prepare students for a 7/13 practice or an 11 practice? Here are my suggestions:

For everyone: Federal Rules of Bankruptcy Procedure and any advanced contracst course that covers more than the typical 4 credit 1st year contracts class.

For 7/13: the Fair Debt Collection Practices Act and TILA.

For 11: any course that helps familiarize students with complex financial products and transactions is worthwhile. Students should understand securitization and credit default swaps, for example. Corporate finance, derivatives, corporate and/or partnership tax are all likely candidates.

A course that covers equitable remedies. Many people, students included, place too much reliance on the pieces of paper, and are reluctant to look for equitable remedies to undo or reform a transaction, or to assert unconscionability without a specific statutory peg.

And once you find out how hard it is to win using those theories, you appreciate the consumer protection statutes even more

Courses in federal jurisdiction (sadly neglected these days) and federal civil procedure are essential. So is a course in trial practice.

And evidence. I forgot to mention evidence.

A course in State & Local law (in addition to good general overviews of tax) might help clarify the many and varied ways in which Bankruptcy Courts interact with State Law.

I also suggest the students read Dickens's "Bleak House" - personal expectations, attachment to homes, irrational behavior in the face of changed material circumstance, are not (and should not be) just abstract ideas in a consumer practice. It is about a case in Equity, not really Bankruptcy, but the novel might clarify some ideas for the students regarding equity practice, government policy, and efforts at reform.

(As a possible incentive to unwilling students, there is human spontaneous combustion as a key plot point, and that always adds a certain zing to a story.)

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.