BankruptcyPROFESSOR LISA SMITH-BUTLER

ADVANCED LEGAL RESEARCH

FALL 2014

Overview

The U.S. Constitution, Art.1, Sec. 8, Cl. 4, gave the U.S. Congress the right to establish uniform laws of bankruptcy. Despite this grant of power, there was little in the way of uniform legislation for almost two centuries.

In 1898, the U.S. Congress passed the first attempt at uniform bankruptcy legislation, the Bankruptcy Act of 1898, 30 Stat. 545 (1898).

In 1978, Congress decided to again reform the by now patched and piecework bankruptcy legislation and passed a new uniform system of bankruptcy codification, the Bankruptcy Act of 1978, 92 Stat. 2549 (1978). The current provisions of the Bankruptcy Code can be located at Title 11 of the United States Code.

The Constitution

The Law Currently in Force: The Code

The Law As Initially Passed: Session Laws & the Statutes at Large

Bankruptcy Amendments

Since 1978, the Bankruptcy Code has been amended several times, including:

Bankruptcy Amendments and Federal Judgeship Act of 1984 (98 Stat. 333) in order to ensure constitutionality of the act after the U.S. Supreme Court decision in Northern Pipeline Construction Co. v. Marathon Pipeline Co., 458 U.S. 50 (1982);

The Bankruptcy Judges, United States Trustees and Family Farmer Bankruptcy Act of 1986 (100 Stat. 3090); &

Bankruptcy Reform Act of 1994 (108 Stat. 4106).

Recent Amendment With Substantial Changes

In 2005, the U.S. Congress passed and President Bush signed the Bankruptcy Abuse and Consumer Protection Act of 2005.

Published at 119 Stat. 23 (2005), this new law substantially changes bankruptcy law, making it more difficult for consumers to receive discharges from debts.

The official code citation is at 11 U.S.C. §§101-1307 (2012.)

Bankruptcy: Title 11 of the United States Code

The Bankruptcy Courts

Types of Bankruptcy

The Bankruptcy Code provides for bankruptcy relief for particular types of debtors. Thus:

Chapter 7 is a straight liquidation for individuals and businesses;

Chapter 9 provides for the reorganization of municipalities;

Chapter 11 provides for the reorganization of businesses;

Chapter 12 provides for the reorganization of the family farmer; &

Chapter 13 provides for the reorganization of individuals.

International Bankruptcies

Chapter 15 “is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in 1997, and it replaces section 304 of the Bankruptcy Code. Because of the UNCITRAL source for chapter 15, the U.S. interpretation must be coordinated with the interpretation given by other countries that have adopted it as internal law to promote a uniform and coordinated legal regime for cross-border insolvency cases.” From the U.S. Courts web site @ http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter15.aspx .

Bankruptcy: Federal or State?

While the right to make uniform bankruptcy laws is reserved for the U.S. Congress, state law is also involved.

11 U.S.C. Sec. 522 acknowledges this, indicating that debtors may exempt property from collection and distribution to creditors if that property is exempted by a state’s legislative provisions.

Most states have elected to provide their own exemptions rather than relying upon the federal exemptions provided by the Bankruptcy Code. South Carolina has its own exemptions which can be located at South Carolina Code of Laws §15-41-30 (1976 & Supps.)

Bankruptcy: Federal or State?

In addition to ascertaining whether federal or state property exemptions apply, state law is also involved via UCC articles 3 and 9, the secured transaction provisions.

When an individual or business files for bankruptcy, creditors jockey for the most advantageous position. The secured creditor (UCC) has status over an unsecured creditor. Thus the status of creditors can be said to be affected by state law, assuming that a state has adopted and enacted the Uniform Commercial Code.

Where Can I Locate Bankruptcy Legal Materials?

As with all American law, bankruptcy legal materials consists of both primary sources of law and secondary sources of law.

Primary sources include:

statutes

regulations

Cases.

Secondary sources of law include treatises, encyclopedias, and periodicals.

Statutes

Bankruptcy law is essentially federal law. It is legislatively created by Congress rather than being created by judges as was the common law.

The Bankruptcy Code can be found in Title 11 of the U.S.C.

State law has very limited application in terms of bankruptcy law. Generally state law is applicable only in terms of property exemptions and the Uniform Commercial Code provisions for secured creditors.

Federal Bankruptcy Statutes

South Carolina Code of Law

In South Carolina, the South Carolina Code of Laws §15-41-35 (1976 & Supps.) specifically excludes the federal bankruptcy exemptions, indicating that “No individual may exempt from the property of the estate in any bankruptcy proceeding the property specified in 11 U.S.C. Section 522(d) except as may be expressly permitted by this chapter or by other provisions of law of this State.”

South Carolina Code of Laws

South Carolina Code of Laws § 36-9-301 (1976 & Supps.) and its provisions provide for the perfection of a security interest in an item for secured creditors.

Regulations

Federal regulations for bankruptcy are scattered throughout the C.F.R. (Code of Federal Regulations).

Many regulations pertaining to bankruptcy can be found in titles 17, 26, and 28 of the C.F.R.

Cases

After 1980, bankruptcy cases can be found in the Bankruptcy Reporter, part of the West National Reporter Series. To access cases by subject with this series, use the Bankruptcy Digest.

Colliers Bankruptcy Cases, 2d Series provides access to the full text of bankruptcy opinions from 1978 onwards. The series concludes with a cumulative index that allows searching by case name, code section, or bankruptcy rule. A citator service is also provided.

CCH also publishes the Bankruptcy Law Reporter which provides the full text of bankruptcy opinions.

Prior to 1980, you can locate bankruptcy decisions in the traditional manner discussed in earlier classes.

Bloomberg Law

Lexis Advance

West: Bankruptcy Reporter

WestlawNext

Other Resources

Bloomberg BNA

CCH

Internet

Periodicals

Treatises

Bloomberg BNA

CCH

Internet

American Bankruptcy Law Institute at http://www.abiworld.org/

Bankruptcy Law at Cornell’s Legal Information Institute at http://www.law.cornell.edu/topics/bankruptcy.html

Bankruptcy Law at Findlaw at http://www.findlaw.com/01topics/03bankrtupcy/index.html

United States Trustee Office at http://www.usdoj.gov/ust/

Periodicals

American Bankruptcy Institute Law Review American Bankruptcy Law Journal Emory Bankruptcy Developments Journal Journal of Bankruptcy Law & Practice

Treatises, Loose Leafs & Hornbooks

Bankruptcy and Related Law in a Nutshell by David Epstein, 8th ed., KF 1501 .Z9 E67 (2013.)

Bankruptcy Forms and Practice by Asa S. Herzog, 9th ed., KF 1527 .H45 (2010 - .)

Bankruptcy Law: Principles, Policies and Practice by Charles Tabb & Ralph Brubaker, 3rd ed., KF 1524 .T32 (2010.)

Bankruptcy by David Epstein, et. al., KF 1524 .E67 (1993.) Bankruptcy Practice Handbook by Rosemary Williams, 2nd ed., KF

1527 .W542 (1995 - .) Collier Bankruptcy Practice Guide by Asa S. Herzog and Lawrence P.

King, KF 1524. C36 (1981- .) Principles of Bankruptcy Law by David Epstein and Steve Nickles, KF

1524 .E67 2007

Questions?

Check out Professor Pearl Goldman’s article, “A Guide to Researching Bankruptcy Law on the Internet” at 8 J. Bankr. L. & Prac. 449 (1999.)

Names to remember: Collier, Epstein, Norton

Contact the Reference Desk.