Is BAPCPA Constitutional?

14 Jul Is BAPCPA Constitutional?

The new bankruptcy law, BAPCPA, which went into effect on October 17, 2005, makes some sweeping and dramatic changes to Bankruptcy laws in this country. Some of those changes are being questioned as to their constitutionality.

The first thing to look at in reviewing the constitutionality of a law is if Congress had the power to pass the law in the first place. Most Congressional power is found in Article I, Section 8 of the US Constitution. The fourth paragraph gives Congress the right to establish uniform laws on the subject of Bankruptcies throughout the states, clearly giving them the power to pass this law.

But is it uniform as the Constitution requires? For example, Maryland has completely different exemptions for property than California. That doesn’t create a fatal flaw, however, since both states offer a set of exemptions and the general process is the same.

Over the next several weeks, I will examine specific provisions of the new law as to their Constitutionality.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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