•  
  •  
 

Abstract

Bankruptcy law has significantly changed in the last two years due to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"). An already complex and challenging area of law, bankruptcy has become even more so, as debtors and creditors begin to question how their rights have changed. For courts, one of the most perplexing issues is whether the standards and interpretations that were established in preBAPCPA bankruptcy cases are still applicable today. As courts have examined the potential effects of the new legislation, different opinions have emerged, leaving even more uncertainty for interested parties. One of the specific uncertainties that has developed involves the interpretation of BAPCPA's so-called "hanging paragraph," which provides preferential treatment in the Chapter 13 bankruptcy process for automobile creditors with collateral-backed claims that have been outstanding for less than 910 days. While it is generally agreed that Congress inserted this provision to benefit these creditors, a significant debate has arisen as to what these benefits are supposed to be. In discussing the various interpretations of the hanging paragraph that have emerged, this Summary will demonstrate that a strong majority of courts have chosen to favor secured creditors, at the expense of debtors and unsecured creditors. Because this interpretation favors a small segment of the lending industry, and because it is inconsistent with BAPCPA's purpose, this Summary concludes that this majority view is mistaken.

Included in

Law Commons

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.