Chapter 12 Debt Limit Should Be Eliminated

By: Donald L Swanson Chapter 12 of the Bankruptcy Code exists for the protection of family farms. However, Chapter 12 has, from the beginning, imposed a debt limit for eligibility [Fn. 1].  This debt limit needs to be eliminated.  Here’s why. Family Farms—Then and Now Back in 1986, at enactment of Chapter 12, the vast majority... Continue Reading →

“United States Bankruptcy Administration” — A 1970s Proposal With Scant Odds

By: Donald L Swanson Imagine a federal bankruptcy agency—like the Securities and Exchange Commission—called the “United States Bankruptcy Administration.” That’s exactly what was proposed by the report of the 1970s Bankruptcy Commission, which resulted in the Bankruptcy Code of 1978. The bankruptcy agency proposal was, in fact, “the most important innovation of the Commission’s report,” along... Continue Reading →

What Happens When Executory Contracts are Rejected? U.S. Supreme Court to Decide (Mission v. Tempnology)

By: Donald L. Swanson When an executory contract is rejected in bankruptcy, what happens to the rights of the other party under that contract: Are those rights vaporized? Do those rights continue as if nothing happened? or Are those rights affected in some other way? The U.S Supreme Court will tackle this question in the case... Continue Reading →

Sometimes Good Things CAN Happen in Bankruptcy for Student Loan Debts

By: Donald L Swanson Every now and then a good thing happens in bankruptcy. It’s not very often—but good things do happen. Here’s a story of one of those good things [Fn. 1]. Our Hero (the bankruptcy Debtor) is a 54 year old, single mother of two college-aged children. She is a self-employed professional in a... Continue Reading →

Eighth Circuit’s In re Knudsen Opinion is Still Good Law on Chapter 12 Taxes — Despite the U.S. Supreme Court

By: Donald L. Swanson In 1986, Congress enacted Chapter 12 of the Bankruptcy Code to help farmers. Throughout the 1980s, many farmers liquidated their farm assets, either voluntarily or involuntarily, and moved on to other careers. Unfortunately, the liquidation left many of them with nondischargeable tax liabilities beyond anything they could ever repay. Congressional Action on... Continue Reading →

How, Decades Ago, the U.S. Supreme Court Screwed-Up Our Bankruptcy World — Twice

By: Donald L. Swanson Here are two declarations of law, by the U.S. Supreme Court and from decades ago, that screwed-up our bankruptcy world — all the way to present: “The bankruptcy power, like the other great substantive powers of Congress, is subject to the Fifth Amendment.” Louisville Joint Stock Land Bank v. Radford, 295 U.S.... Continue Reading →

An Ancient Bankruptcy Law in China

By: Donald L. Swanson Centuries ago (during the 1200’s) the Mongols ruled China. Mongol law in China "provided for declarations of bankruptcy.”  Here are some details: —“no merchant or customer could declare bankruptcy more than twice as a way to avoid paying debts”; and —“On the third time he faced the possible punishment of execution.” [Fn.... Continue Reading →

Appeals to Bankruptcy Appellate Panels and “Sandbagging”

By: Donald L. Swanson One of the best innovations in the U.S. bankruptcy system is creation of bankruptcy appellate panels (“BAPs”), as a division of the U.S. circuit courts of appeals.  BAPs hear appeals of bankruptcy court decisions. Currently, there are five BAPs, one in each of the following circuits: First, Sixth, Eighth, Ninth and... Continue Reading →

Effects of Executory Contract Rejection — At U.S. Supreme Court

By: Donald L. Swanson Here’s a case about the effects of executory contract rejection. While its focus is on “intellectual property” rights under § 365(n) [Fn. 1], the case also delves into the effects of rejection for all types of executory contracts under § 365(g) [Fn. 2]. And this case demonstrates the hazards of a failure... Continue Reading →

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