Jay Lawrence Westbrook

Part I - Individual Debt Collection (non-judicial remedies, State law debt collection); Part II - Consumer Bankruptcy; Part III - Business Bankruptcy (Ch 7 liquidation, Ch 11 reorganization); Part IV - Functions and Boundaries of Bankruptcy - jurisdiction, transnational, function of bankruptcy/theory. Case book with index. No coverage of credit damage, recovery for reputation, etc.

Very good on the theory of bankruptcy and attempt to trace a rationale in the cases and technical provisions. For example, distinctions between secured and unsecured, impact of taxes, cramdown limitations, inter alia.

Cites empirical and academic studies. For example, Professor Whitford'scritique of the consumer credit collection system [6] which explained and documented the fact that of the consumer debts ultimately paid, the vast majority are collected through "consensual" debtor payments, after bargaining (often with other creditors). Very few delinquent debts are paid as a result of coercive execution. The point remains, however, that the availability of lawful coersion has an impact on that negotiated process. Leverage is the key to collection and law provides leverage--to both sides. [8]

The 1998 requirement that banks report debtors who fail to pay more than $600 debts was a boost to the industry's debt collection, where the IRS is known to be an effective collector. [9] The regulation is prolix and incoherent, but it enhances collection all the better. And nothing prevents the creditor from declaring the debt "discharged", notifying the IRS, and then resuming collection.

The extension or withholding of credit is classic leveraging. Creditors have an inexpensive, fairly accurate method of tracking debtor payment behavior through established credit reporting agencies. The loss of a credit rating with a credible withholding of credit by other creditors is collection leverage. The creditor has the ability to make negative reports so as to influence the debtor's credit rating.

The Fair Credit Reporting Act [FCRA] acknowledges industry abuses, privacy concerns, and the "enormous impact of the desire to protect future credit". [12] 15 USC 1681. The credit industry has mushroomed in the past twenty years--more than 1,100 credit and mortgage reporting companies, listing 450 million credit files on American consumers. [13] Despite the stakes and the credit industry's self interest, in 1993 the US Congress documented the fact that 48% of credit reports sampled from the three major credit bureaus contained inaccurate information. S.Rep. 103-209, 103d Cong. 1st Sess., 3 [Dec 9, 1993].

De-regulation. "The de-regulation of consumer credit has profoundly altered the world of consumer credit". [17] Speaking of usury laws, profoundly impacted by the 1978 US Supreme Court opinion of Marquette National v. First Omaha, 439 US 299. Once the Court held that a national bank could charge whatever interest was legal in the state of the bank's principal office, Delaware de-regulated to attract banks, and local usury laws became irrelevant. Other local regulations of credit followed suit, and like interest rates are now effectively de-regulated.

Fair Debt Collection Practices Act [FDCPA] 15 USC, SS 1692ff., which applies to lawyers who regularly use litigation to collect consumer debts (Heintz v. Jenkins (1995) 514 US 291), is the federal government's response to abuses. In the 1990s we saw a stream of cases imposing lender liability: Duffield v. First Interstate 13 F3d 1403 (10th Cir 1993), where the jury found that the bank made an oral agreement with Duffield to apply the proceeds of his collateral sale to cure defaults. A $6 million award was upheld on bad faith even though the bank's conduct was expressly permitted by its loan agreement. [41].… (plus d'informations)