October 17, 2007 marks the second anniversary of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). As with most in the bankruptcy community, I have railed against the changes wrought by this poorly written and mean-spirited law. See BAPCPA’s Biggest Blunders, Involuntary Bankruptcy and the Credit Counseling Conundrum, Why I Hate Pre-Bankruptcy Credit Counseling, How Will the New Bankruptcy Law Affect Me, Bankruptcy Basics–What About the New Bankruptcy Law?, Top 15 Myths About the New Bankruptcy Law and my article published in the Maryland Bar Journal, Not Dead Yet: Bankruptcy After BAPCPA. Although the stated purpose of BAPCPA was to “stick it” to debtors and debtor’s attorneys, from a number of perspectives, BAPCPA has been a great benefit to both groups. “How?” you ask?
1. The Skill Level of Bankruptcy Attorneys Has Risen. Due to the required time and money investment in learning the new law, buying new software, drafting new forms, etc., many attorneys who practiced bankruptcy law occasionally stopped. Likewise, those bankruptcy attorneys who did not want to learn the new law also left. This left the field largely to those attorneys whose practice consists solely or largely representing debtors in bankruptcy. These lawyers who remained in the field generally have a higher level of knowledge of the Bankruptcy Code and practice, and are more experienced in representing debtors in bankruptcy and in trying bankruptcy cases. The overall level of competence of the debtor’s bar (those attorneys representing debtors in bankruptcy) rose.
2. Many Bankruptcy Attorneys Became More Proficient In Consumer Protection. Due in part to fear over whether the practice of bankruptcy would remain viable, many consumer bankruptcy attorneys began to learn more about consumer protection law–RESPA, TILA, HOEPA, FDCPA, FCRA and the other “alphabet soup laws” providing protections for consumers. (A translation: RESPA = Real Estate Settlement Practices Act, TILA = Truth in Lending Act, HOEPA = Home Ownership and Equity Protection Act, FDCPA = Fair Debt Collection Practices Act, FCRA = Fair Credit Reporting Act.) The additional knowledge learned allows many bankruptcy attorneys to also assist their clients with the common violations of these laws that occur before and after a bankruptcy case, and better protect them from creditor abuses during their case.
3. Some Provisions of BAPCPA Actually Help Debtors. Examples are found in the waiver of the filing fee for low-income debtors, the ability to file zero percent Chapter 13 Plans, new protections for debtors under § 524(i), the ability in some states to surrender a car in full satisfaction of the debt, reduction of interest rates on auto loans, etc. Further, a number of states have increased exemptions for bankruptcy cases.
4. The Debtor’s Bar Has Grown Stronger. Due to the necessity to learn the new law, debtors’ attorneys have strengthened and deepened. Membership in the National Association of Consumer Bankruptcy Attorneys, which has some marvelous education programs, is at an all-time high. Attendance at CLE (Continuing Legal Education) sessions by bankruptcy attorneys is at an all-time high. And there is a sense of community that has grown. The Bankruptcy Law Network is but one example.
So happy birthday, BAPCPA. Although I wish you’d never been born, and hope much of you will be thrown out, some of your after-effects may be positive after all.
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