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Unjust Debts -- A New Book from Melissa Jacoby

posted by Bob Lawless

Today is the publication date for Unjust Debts: How Our Bankruptcy System Makes America More Unequal from University of North Carolina law professor and Slipster, Melissa Jacoby. This book will be the talk of the bankruptcy community. Be the first in your firm or organization to have a copy. The book is available on Amazon or (better yet) Bookshop.org. 

Bankruptcy touches most every aspect of modern-day financial life. Professor Jacoby questions whether bankruptcy works as an effective second chance for everyday Americans while documenting the many ways the system allows powerful individuals and corporations to escape commitments. As such, she shows how the bankruptcy system contributes to inequality. For those who work in the bankruptcy system, her thesis may be controversial. For those who are not immersed in that system, the book will be eye opening.


From the perspective of the consumer debtor's bar, the overwhelming benefits that Chapter 11 debtors receive compared to Chapter 13 debtors. These include the "front-loaded" discharge at confirmation, the absence of a trustee, third-party releases (contrast the Sacklers and their modest contributions to the plan with the requirement in Chapter 13 that co-signed debts require payment in full to grant just a stay and not a discharge), longer periods over which to pay secured and priority debts, binding creditors with misleading voting, the broad deference given to "non-standard" plan provisions, etc. (Many of these Chapter11 benefits would be available to consumers through the Chapter 10 envisioned in Sen. Elizabeth Warren's Consumer Bankruptcy Reform Act.)

Since Congress will never make bankruptcy more fair by holding corporations to account in Ch. 11, instead giving consumers the same rights is certainly more likely, right?

Interview with Melissa Jacoby on the Marketplace Morning Report podcast. It's not the lead story

Supply chain drama … again
Marketplace Morning Report

We’re heading into another summer with the specter of serious supply chain disruptions. The union representing dockworkers at ports on the East and Gulf Coasts has called off negotiations with shipping companies, because the union says those companies are trying to replace workers with automation. Also: a look at how failing to meet kids’ basic needs hurts their educational outcomes and how bankruptcy has become an “escape hatch” for big corporations.

Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/marketplace-morning-report/id137329814?i=1000658650128

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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.