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Abstract

On April 20, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of ("BAPCPA") was signed into law and became fully effective for cases filed on or after October 17, 2005. 4 After considering bankruptcy reform for almost a decade, Congress ultimately concluded that some debtors were abusing bankruptcy laws by, among other things, discharging debts they had the means to pay. To curb this perceived abuse, Congress decided to radically overhaul the consumer provisions of the Code by generally making it harder for an opportunistic or "Abusive Debtor" to discharge his debts. Given the sweeping nature of these changes, it is appropriate to consider whether race matters in bankruptcy reform. Part II of this Article briefly reviews the goals and structure of bankruptcy relief. Part III describes the Ideal Debtor pre-BAPCPA and briefly explains why, pre-BAPCPA, whites likely received the most benefits from filing for bankruptcy. Part IV presents the "Abusive Debtor" profile that caused Congress to enact BAPCPA; then, it briefly describes BAPCPA's most significant changes to the existing consumer bankruptcy laws. Part V of the Article briefly discusses how BAPCPA affects the pre-BAPCPA Ideal Debtor; then, presents the demographic features of the debtor profile that would be most harmed by BAPCPA. Part VI notes that the financial characteristics attributed to the Abusive Debtor are more likely to be found in white debtors. Indeed, despite the Code's general bias in favor of white debtors, a hypothetical white debtor would be harmed more than a hypothetical minority debtor by BAPCPA's most controversial provision (i.e. the means test) because whites have relatively higher incomes. Likewise, given their higher home ownership rates, white homeowner debtors would be harmed more by the limitations BAPCPA places on homestead exemptions and exemption planning than minority debtors would. Part VI observes, however, that other BAPCPA provisions widen the racial benefits gap, including those that make more student loan and family support debts nondischargeable as well as giving more favorable treatment to debtors who have interests in retirement accounts or who send their children to private schools. Because even BAPCPA's supporters conceded that few people would flunk the means test6 and because BAPCPA places only modest restrictions on homeowners, the Article concludes by suggesting that bankruptcy laws likely will continue to disproportionately benefit white debtors.

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