Non-Bankruptcy Law in Bankruptcy Courts

This past year's American Bankruptcy Law Journal symposium at the National Conference of Bankruptcy Judges' Annual Meeting addressed the role of bankruptcy law in the larger U.S. legal system. The ABLJ recently published the related academic papers from that symposium. You can find them on the front page of the ABLJ site now. One of which I was honored to write.

My contribution, The Periphery of Bankruptcy Law: The Importance of Non-Bankruptcy Issues in Consumer Bankruptcy Cases, focuses on the range of state law exemption issues, UCC security interest issues, and federal and state consumer protection legal issues that appear in consumer bankruptcy filings to highlight how bankruptcy courts are one of the leading venues where people's non-bankruptcy legal problems may be litigated. In the piece, I write about how attorneys, trustees, and judges can provide people with a legal process to deal with their financial problems that they find meets their beliefs about what the bankruptcy process will offer them. Doing so will benefit individual debtors and the bankruptcy system, as a whole. As Slipster Bob Lawless has calculated, one in eleven Americans will file bankruptcy at some point during their lives. The chapter 11 cases of large companies and some non-profits make headline news. The public's perception of the bankruptcy system matters to the legal system's integrity.

In addition, the non-bankruptcy law issues brought to bankruptcy courts have the potential to effect change in state law that matters to people. One example that I highlight in my paper comes from Minnesota. For years, the phrasing of Minnesota's exemption language about "household appliances" raised the question of whether personal computers and smart phones were "household appliances." This question had led some debtors to buy these items back from the bankruptcy estate, which, of course, required expending some money. Eventually, not only did Judge Kesha Tanabe, Bankruptcy Court for the District of Minnesota, rule that personal computers and smart phones were "household appliances," but also that decision helped induce the Minnesota legislature to updated its exemption statute to include "computers, tablets, televisions, printers, cell phones, smart phones, and other consumer electronics of the debtor and the debtor’s family . . . ." 

Find my contribution to the ABLJ symposium here.