By: Donald L Swanson
Here are five points explaining why the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) should be enacted . . . appearing on the opening page of this “Report of the Committee on the Judiciary, House of Representatives” (at fn. 1, emphasis added):
- “Shoplifting is wrong; bankruptcy is also a moral act”;
- “Bankruptcy is a moral as well as an economic act”;
- “There is a conscious decision not to keep one’s promises”;
- “It is a decision not to reciprocate a benefit received, a good deed done on the promise that you will reciprocate”; and
- “Promise-keeping and reciprocity are the foundation of an economy and healthy civil society.”
Say, what?!!
Whatever happened to the “honest but unfortunate debtor” that bankruptcy has historically tried to protect?
And what about these folks:
- the person facing a medical emergency with insufficient insurance?
- a parent abandoned by a spouse?
- a family with an unexpected job loss?
For such folks, Congress’s answer through BAPCPA is this: “Too bad, so sad. You are no better than shoplifters”
Seriously. That’s the answer. Here’s how the Report cited above gives that very answer:
- opponents of BAPCPA contend that “most bankruptcy filings result from causes beyond debtors’ control, such as family illness, job loss or disruption, or divorce”; but
- the BAPCPA reforms are “nevertheless necessary” (id. at 4).
[Translation: Honest but unfortunate folks may exist, but we are going to treat them as abusive bankruptcy filers anyway—the same as shoplifters.]
Conclusion
Bankruptcy filers are bad people that should be punished, not protected.
- That’s a foundational assumption for BAPCPA.
And that is morality run amok.
20th Anniversary!
NOTE: The year 2025 is the twenty-years anniversary of the enactment of BAPCPA. This article is the sixth in a series of seven articles looking back over what BAPCPA has wrought.
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