Abstract
As a social program for individual debtors dealing with financial upheaval, Chapter 13 of the federal Bankruptcy Code is a failure and has been from its inception nearly 90 years ago. It is overly complex, internally inconsistent, and the product of congressional schizophrenia. There is no eagerness to fix it and no interest in eliminating it, which are both suggestions I have offered in the past. And so, with two strikes against me, I’ve decided to take my third and final swing. Using one of the most recent subjects of judicial disagreement over the proper application of the statute as a launching point, I propose the only remaining hope is for the courts to develop a coherent Chapter 13 jurisprudence in those areas where the statute fails to do so. Abandoning the understandable but ultimately futile effort to rationalize a particular outcome based on the statutory scheme as a whole, I offer the heretical and controversial suggestion that the bankruptcy courts bring some measure of order and sense to these issues by focusing on outcomes that balance the purposive goals of Chapter 13, including debtor rehabilitation, creditor equality, and value maximization. These goals are far from being perfectly harmonious, but that is true of the system writ large, as bankruptcy at its core is in a constant search for the point of ideal equipoise between debtor protection and creditor rights. Sometimes dubbed bankruptcy exceptionalism, I urge deference to the exercise of sound discretion by those courts that know the system best. While a radical proposition in an era of textualist hegemony, some comfort can be taken in the fact that it sure can’t make things any worse.
Recommended Citation
Lawrence Ponoroff,
Unlucky Chapter 13,
91 Mo. L. Rev.
(2026)
Available at: https://scholarship.law.missouri.edu/mlr/vol91/iss1/8