Bankruptcy

BAPCPA: Blessing or BARF?

Unless you’ve been hiding out with Jimmy Hoffa lately, you’ve probably heard a thing or two about bankruptcy reform in the past year - though you may not understand the details or get exactly why people seem so up in arms over the topic. The answer, in one acronym, is BAPCPA - the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

If you ask a member of the Republican-controlled Congress that led the legislative push for the enactment of this law, or the frighteningly-well-resourced consumer credit issuer lobby that egged them on, BAPCPA is a shining example of true reform, a much-needed redress of rampant abuse of bankruptcy law by unscrupulous debtor attorneys and the deadbeat clients whom those attorneys help avoid their lawful obligations by making serial filings of bankruptcy petitions.

If you ask one of those attorneys or their clients, your only response may well be eyerolls and heavy sighs. To the attorneys and those unlucky few who’ve already had a taste of BAPCPA in action, the act is more appropriately called BARF - Bankruptcy Abuse Reform Fiasco (so referred to by many consumer debtor attorneys, including the authors of the linked-to blog).

Who’s right? Was there rampant abuse that needed to be checked? Were serial filings a real problem? Will BAPCPA really prevent abuse and protect consumers, as its title promises?

In order: No, most likely not, and absolutely not.

BARF (so it shall be known here at the SC Consumer and Bankruptcy Law Blog) is a horrid piece of legislation. Putting aside the substantive issues and policies behind BARF for a moment, it’s simply badly written from an objective standpoint. Full of non sequiturs, vagueness, and outright contradiction, it’s a procedural court’s worst nightmare. How do you begin to reconcile and put into action such a mishmash of bad legal writing? It’s rather as if some have simply thrown up their hands and given a big “Whatever” to the topic.

South Carolina’s consumers deserve better. They deserve a law that actually does protect consumers - not one, such as BARF, which accomplishes just the opposite. They deserve a law that allows them the full protection and long-held promise of bankruptcy’s fresh start - the discharge of debts which acts as a crucial relief valve for a volatile economy that can wreak havoc on tight budgets. And they certainly deserve protection from an overbearing, overreaching, greedy consumer credit industry.

In upcoming posts, I’ll explore some of the specific problems and issues with BARF, and in so doing, I hope I can communicate adequately one key premise: consumer debtors would be ill-advised to wander the maze this legislation has created alone, or accompanied only by so-called bankruptcy petition preparers (BPPs). They need lawyers who know how to deal with these issues and who can help them navigate some pretty rocky shoals without sinking the boat altogether.

© 2006 SC Bankruptcy & Consumer Law Blog.