Thursday, February 08, 2007

Bankruptcies Down After BAPCPA

While at the bankruptcy court today, I talked with a colleague about the number of bankruptcies being filed. She told me that she went through the records and found that bankruptcies are down 80% since before the law changed in the Western District of Oklahoma.

So far, all bankruptcies that I have filed have qualified for Chapter 7 (liquidation) or Chapter 13 (reorganization). However, I feel that it is just a matter of time before we run into a case that will fit into neither section. If that happens, I think that would raise the issue of the BAPCPA's constitutionality. All laws must pass the Rational Basis Test ("RBT") in order to qualify as constitutional. Usually, this is a very easy test to pass. In order for a law to pass constitutional muster, it must at least have some rational relation to a legitimate government interest. There is also the question, if the scenario of a debtor not being eligible for wither section of the bankruptcy act happens, the issues of denial of due process and equal protection will come into play. It hasn't happened yet, and it may not happen; but the law is so roundly criticized by all attorneys, trustees and judges because of how confusing it is that it is not out of the realm of possibility that at some point someone will raise the constitutional question.

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