The New Bankruptcy Code and You Achieving Financial Fitness after Financial Failure

It takes a special talent to explain
complex, technical matters to non-experts in a way that is both
informative and entertaining. Prof. <b>Nathalie Martin,</b> a professor
of law at University of New Mexico School of Law in Albuquerque and
ABI's fall 2005 Robert M. Zinman Resident Scholar, has that special
talent, and she displays it marvelously in her new book, <i>The New
Bankruptcy Code and You: Achieving Financial Fitness after Financial
Failure,</i> part of the popular J.K. Lasser series. Based on her years
of experience counseling consumer debtors and educating future lawyers,
Prof. Martin presents a total picture of the consumer financial roller
coaster and how readers can successfully navigate the ride. The book
offers far more than a careful and enlightening first look at the
confusing new bankruptcy law; it brings the world of consumer finance
into clear focus and places bankruptcy in context as an unfortunate but
important part of that world. Financial counselors, bankruptcy lawyers
and other consumer finance experts will find this book both engaging and
informative, but their current and potential clients are the book's
primary audience. For consumers who want to know more about financial
planning, economic distress and the bankruptcy process, including what
bankruptcy can (and cannot) offer them and how they can come back from
their descent into financial purgatory, this book is a unique gem.

</p><p>Prof. Martin begins by guiding the reader gently into the touchy
topic of financial failure. Demonstrating a level of sensitivity and
compassion that comes from years of face-to-face contact with debtors in
trouble, she begins by easing the guilt and shame that financially
overextended people often feel. The opening chapters place individual
consumer financial distress in its proper context, offering debtors a
crucial and often neglected perspective. After a general upheaval in
consumer finance in the United States over the last several decades, the
days of simple and predictable consumer finances are now a distant
memory. It should surprise no one that consumer financial distress is
sharply on the rise, given the backdrop of such developments as the
explosive growth of long-term home loans (including often-dangerous home
equity loans), aggressive if not abusive marketing and processing
tactics by credit card issuers, the dynamic and unpredictable job
situation and "outsourcing," and the looming health care crisis.

</p><p>While some recent observers bemoan the "paradox" of rising bankruptcy
filings in times of historically high general economic welfare, this
discussion reminds us that welfare is not evenly distributed, and crisis
strikes a select few harder than others. Prof. Martin brings to bear the
latest trends and research to clarify just how sharp the razor's edge
between financial health and failure has become. Economic distress
results from a multiplicity of contributing causes, and the introductory
chapters remind distressed readers that profligate spending and failure
to plan are far from the most prominent causes of their problems.

</p><p>Establishing a holistic view of the consumer financial system, the
book continues with a concise roadmap for minimizing debt, budgeting and
saving to build financial stability and a personal safety net. Martin
makes this discussion both fun and engaging with personal anecdotes
about her own household's approach to saving and spending. At one point,
for example, she recounts how her husband "wrapped sticky tape around
both our [credit] cards" to motivate them to pay off a balance more
quickly. Readers following this advice might avoid bankruptcy
altogether, but they certainly can use Prof. Martin's guidance to
rebuild their financial lives after bankruptcy.

</p><p>This unique contribution to the existing "how-to" consumer finance
literature adds a "positive" to the "negative" of temporary money
trouble. Its placement early in the book draws the reader in with a
subtle reminder that financial health is just around the corner. As she
reveals in detail the very real dangers of credit cards and
overspending, Prof. Martin maintains a positive focus by empowering
readers to beat the credit card issuers at their own game. Masterfully
avoiding a presentation that comes off as preachy or condescending,
Prof. Martin encourages personal responsibility in a positive and
constructive way.

</p><p>Warming up for the main exercise to come, the following chapters
offer a refreshingly engaging and complete introduction to general
debtor-creditor law. Here is where Prof. Martin's experience as a great
teacher begins to really shine. She guides the uninitiated from absolute
zero to a quite sophisticated analysis of the law governing the
debtor-creditor relationship. Readers develop a level of expertise
without realizing it, and therefore without an opportunity to resist the
conceptually complex material. The book even includes a nice glossary of
debtor-creditor law terms and a detailed listing of state exemptions.

</p><p>One particularly useful and rare contribution is the discussion of
bankruptcy alternatives and specific types of debtors for whom
bankruptcy is either unnecessary or unhelpful. Few "do-it-yourself"
bankruptcy manuals contain any discussion of these important issues, and
Prof. Martin's discussion is particularly revealing and insightful.
Financial distress comes in many varieties, and Prof. Martin offers an
all-too-rare explanation of how bankruptcy is not a magic pill for all
ills.

</p><p>The remainder of the book offers a careful and detailed step-by-step
guide through the bankruptcy process. To the envy of many a commercial
law professor, Prof. Martin manages to cover intricately detailed
material without devolving into a dry "cookbook" discussion. She
maintains a disarmingly chatty and personable presentation while
providing extremely detailed and complete coverage of the entire
process, from preparing to file (information review, document
collection, timing the filing, line-by-line analysis of the required
paperwork, the new credit counseling requirement) to issues arising
during chapter 7 and chapter 13 cases (§341 meeting of creditors,
automatic stay, avoiding powers, treatment of secured and unsecured
creditors, the new financial management training requirement) to
post-bankruptcy and the discharge (including its many exceptions). Prof.
Martin's discussion of the new "means test," as it will apply in both
chapter 7 and chapter 13 cases, is particularly lucid and helpful, as is
her discussion of the key changes facing filers after Oct. 17, 2005.
Even experienced professionals can benefit from this "transition"
discussion.

</p><p>True to the title of the book, Prof. Martin concludes with a brief
chapter on investing to rebuild financial fitness. In a brilliant
psychological move, she closes with a reminder that things will get
better, perhaps much better—how energizing it is that a book on
financial distress closes with a high note on financial health. This is
not just one more among many books about the bankruptcy process. It is a
book about managing debt and using the law wisely to regain financial
health after trouble strikes. Prof. Martin achieves the hefty goal she
sets for herself in the title, and she does it with style.

</p><p>This book should be on the reception table of all credit counselors
and consumer lawyers who want their clients to really <i>understand</i>
what they are getting into and what it will take to get out. Prof.
Martin's book is every bit as entertaining as the latest issue of
<i>People</i> or <i>Newsweek,</i> and its coverage of the very real
problems consumer readers face is far better than the superficial advice
found in such pop-culture sources. This book demonstrates the magic that
an author who is also a great teacher can perform.