Debt-based driving restrictions: new resources
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Melissa Jacoby
1d ago
Professor Kate Elengold and UNC Law 2L Michael Leyendecker have just posted very useful reports for no charge on the Social Science Research Network.  In Professor Elengold's words, these reports "classify, catalog, and cite every state law restricting driving privilege based on debt owed to the state or pursuant to a state-controlled system." This includes criminal or civil fines and fees,child support, taxes, tolls, and more. The Twitter announcement of these resources indicates that they welcome additions and corrections, and that a related scholarly article from Professor Elengold wil ..read more
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The New Usury
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Adam Levitin
4d ago
I have a new paper up on SSRN. It's called The New Usury: The Ability-to-Repay Revolution in Consumer Finance. It's a paper that's been percolating a while--some folks might remember seeing me present it (virtually) at the 2020 Consumer Law Scholars Conference, right as the pandemic was breaking out. Here's the abstract: Consumer credit regulation is in the midst of a doctrinal revolution. Usury laws, for centuries the mainstay of consumer credit regulation, have been repealed, preempted, or otherwise undermined. At the same time, changes in the structure of the consumer credit mark ..read more
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#PublicDebtIsPublic and #DebtCeilingIsStupid
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Anna Gelpern
1w ago
What could possibly trigger me enough to break a two-year blogging hiatus? A sudden burning desire to consider the difference among budget accountability, debt accountability, and the inane, moronic, irrational, exploding human appendix ****show that is the debt ceiling. Budget accountability is essential. That is why the U.S. Congress authorizes various parts of the U.S. government to do and buy things and, separately, appropriates resources to pay for those things. These resources might come from some combination of three buckets: (1) taxing people/things/activities, (2) selling stuff, or ..read more
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Postpetition Asset Sales in Chapter 13s--Modification, Not Estate Property
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Bob Lawless
1w ago
Debtors selling houses during a chapter 13 continues to cause conceptual problems for the courts. A recent decision, In re Marsh, from Judge Fenimore in Kansas City is an example. (Hat tip to Bill Rochelle for flagging this decision in his DailyWire column from the American Bankruptcy Institute ($). If you are a bankruptcy lawyer and don't get this column in your inbox each morning, you are missing out.) Judge Fennimore's opinion is a good point of departure to discuss why I don't think these conceptual problems are as difficult as lawyers make it out to be. In the case at hand, the debtors sc ..read more
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Biden DOJ's Excellent Pick to Head USTP
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Bob Lawless
2w ago
The Department of Justice has announced Tara Twomey as the next head of the U.S. Trustee Program (USTP). This is an outstanding selection. I will leave her impressive biographical details to the DOJ press release, which you really should read. We here at Credit Slips would have added that she is a former guest blogger for us (which is probably why we are not allowed to write DOJ press releases). Having known Director-designate Twomey for quite a few years, I wanted to add a few things that are not in the release. She is universally respected by her colleagues. Twomey is innovative in her appro ..read more
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Impact of the Illinois Predatory Loan Prevention Act
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Adam Levitin
3w ago
In 2021 Illinois passed its Predatory Loan Prevention Act (PLPA), which imposes a 36% military APR (MAPR) cap on all loans made by non-bank or credit union or insurance company lenders. Not surprisingly, the law has not been popular with higher cost lenders who either have to change their offerings, cease doing business in Illinois, or figure out some way to team up with a bank that won't run afoul of the law's anti-evasion provision.  Recently, opponents of the PLPA have been making some noise, pointing to a study by a trio of economists—J. Brandon Bollen, Gregory Elliehausen, and T ..read more
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The Texas Two-Step's Liquidation Problem
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Adam Levitin
3w ago
This post is a joint post by Hon. Judith K. Fitzgerald (ret.)[*] and Adam Levitin The Texas Two-Step has been the latest fad in mass tort bankruptcies, used, among others, by Johnson & Johnson, Georgia-Pacific, and, in a variation, 3M. The essential elements of the Texas Two-Step are the segregation of the debtor's mass tort liabilities in a non-operating subsidiary, which then enters into a funding agreement with the parent company to cover the mass tort liabilities up to some level. The subsidiary then files for bankruptcy and seeks to have the court stay the mass tort lit ..read more
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Sorting Bugs and Features of Mass Tort Bankruptcy
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Melissa Jacoby
3w ago
I have posted a short draft article about mass tort bankruptcy. If you would like to send me comments on the draft, that would be lovely, but please keep two caveats in mind. First, I must submit the revisions by February 9. Second, the article must not exceed 10,000 words. For every addition, some other thing must be subtracted. The required brevity means the article does not and cannot canvas the large volume of scholarship about the topic, let alone the mini-explosion in recent years.  For the Credit Slips audience I would like to particularly highlight Part I of the article, whic ..read more
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New Year, New Personal Bankruptcy Law--in Kazakhstan
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Jason Kilborn
1M ago
The list of countries with new personal insolvency laws continues to grow. Bloomberg noted today that the President of Kazakhstan had signed a new law setting out several procedures for relieving the debts of non-entrepreneur individuals (sole proprietors remain relegated to the existing law on rehabilitation and bankruptcy). The text of this 30 December 2022 law is here (in Russian only), and most of its provisions will become effective in 60 days, around March 1, 2023.  The structure of this law and its four pathways to relief are clearly inspired by the 2015 law of Kazakhstan's norther ..read more
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The Financial Inclusion Trilemma
Credit Slips | A Discussion On Credit, Finance & Bankruptcy
by Adam Levitin
1M ago
I have a new draft article up on SSRN. It's called The Financial Inclusion Trilemma. The abstract is below.  The challenge of financial inclusion is among the most intractable policy problems in banking. Despite being the world’s wealthiest economy, many Americans are shut out of the financial system. Five percent of households lack a bank account, and an additional thirteen percent rely on expensive or predatory fringe financial services, such as check cashers or payday lenders. Financial inclusion presents a policy trilemma. It is possible to simultaneously achieve only two of thr ..read more
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