Tuesday, November 09, 2010

Bankrutpcy Language Note

We in the bankruptcy customarily distinguish between "consumer"and "business" bankruptcy.  You can pretty much surmise with the distinction means: "consumers" are individuals who file for Chapter 7 to get a discharge, or maybe for Chapter 13 to pay off some of their debts.  "Businesses" are, well, General Motors, who use Chapter 11 to "reorganize" (itself a term of near-infinite malleability).

Today I get an e-flyer for a continuing education program in "Consumer and Residential Bankruptcy."  Residential?  Well to be fair, once again, I'm pretty sure I understand what is being said: we're talking about debtors who are concerned not so much with the discharge per se, but with the tools that bankruptcy might offer to help them fight off the mortgage lender, and to stay in their home.  What with the 2005 amendments to our bankruptcy laws, plus the subprime meltdown, it certainly is the case that bankruptcy practice has morphed quickly and dramatically into a different system than the one I grew up with.

Still, taking a longer view, this is just one more incident of a process that has gone on, well, forever.  Bankruptcy began as a creditor collection device--still is, sometimes.  It developed into a quasi-punitive weapon--still is, in some places (though hardly the US).  Only in the 20th Century did it become a device for an easy off-the-rack discharge.  I can think of other examples but I'll save them for a learned paper (which I almost certainly will not bother to write).  

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